Bill Shock recedes in EU, rises in Asia

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Bill Shock recedes in EU, rises in Asia

Tony Poulos  |   February 05, 2010
Billing and OSS Supplement
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Billing and OSS Jan 2010
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201001

The term "bill shock" sends a shudder down the spine of people receiving it and operators causing it. Most bill shocks are handled by calls to customer care. In fact, billing inquiries make up the greatest percentage of calls to operator call centers, worldwide.

Quite regularly, major bill shocks make national and international headlines. A recent classic being a German resident downloading a TV program while roaming in France facing a bill of E46,000 when he got home.  But that's all about to change, and service providers will have to comply with cut-off requirements by March in order to comply. And for some, this could be quite a challenge. The days of European bill shocks may be well and truly numbered. Last year was a monumental year for European mobile customers roaming in other EU member states, benefiting not only from lower prices for making and receiving calls but also for texting when abroad and using data services.  For those unaware of the far-reaching regulations, the many in force since July 2009:

  • Limit the price for sending a text message while abroad at E0.11. Receiving an SMS in another EU country remains free of charge;
  • Reduce the cost of surfing the web and downloading movies or video programs with a mobile phone while abroad by introducing a maximum wholesale cap of E1 per megabyte downloaded (this limit will be decreased each year);
  • Include further reductions in prices for mobile roaming calls with a maximum tariff of E0.43 for making a call and E0.19 for receiving one;
  • Introduce per second billing after the first 30 seconds for calls made and immediately for calls received;
  • And ensure that citizens are kept adequately informed of the charges that apply for data roaming services.

However, by March this year new rules will also protect consumers by introducing a cut-off mechanism once the bill reaches E50, unless subscribers choose another cut-off amount. This will effectively mean that all roaming calls will have to be monitored in real-time to ensure that a customer balance is not exceeded.  This will mean quite extensive changes to the way post-paid accounts are handled and will require considerable investment to bring systems into a real-time state.

Many CSPs might bemoan the extra investment and the fear that their revenues may be impacted (some reports claim revenue loss exceeding E6 billion), but there could be considerable light at the end of the regulatory tunnel.  Roaming has, to date, clearly been the domain of the wealthy or those with corporate accounts.  Ordinary roamers and tourists learnt years ago that any other type of call is cheaper than a roaming mobile call.  Regular travelers often resort to carrying two phones and purchasing a local prepaid SIM in every visited country to avoid exorbitant roaming charges, and Skype is the order of the day in every hotel room with an internet connection. Not surprising when it is reported in some markets that 90% of roamers have experienced some form of bill shock when roaming.

With the economic downturn, many road warriors' roaming habits have also been curtailed by management, and operators in some markets have seen a noticeable drop in roaming revenues. Now with regulated charges and self-imposed cut-off limits, your average traveler may be tempted back.

Sadly, the European legislation only applies to roamers from and roaming to member countries, but if the action creates a new market segment, particularly smartphone users reliant on data access at all times, then there could well be a sharp increase in roaming revenues.  If this does occur, we could see similar rules adopted in non-Euro markets, especially among mobile operators that belong to one of the many alliances that are in place but go unnoticed because of their lack of beneficial customer policies.

So it will be up to the operators to persuade subscribers to use their devices more.

And what hope for Asian roamers?  Despite promises of fairer deals by a number of mobile SP alliances, roaming is still inhibitive for most.  What truly surprises many is that those Asian mobile operators with the lowest domestic call rates seem to make up for lost revenue with the highest roaming rates.

Tony Poulos is the TM Forum's sector head for revenue management

Tony Poulos

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