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September 8th, 2009How location-based apps are dead in the water until someone fixes the extortionate rates of roaming charges

Posted by Editor in Business models we'd like to see, Carriers, conectivity, data, datarates

A recent trip to Italy really drove home the point of how useless our fancy mobile phone are the minute we step across a border. At the going rates from our carriers of $2/min, $1/sms, $12-$30/MB + GST/PST etc. you really have to want to use that phone to make it worthwhile. Or your company is paying the charges which in turn works out to a hell of a productivity tax on Canadian companies trying to do business globally.

But just think of mobile apps for a minute. LBA or location based apps have been hyped as some kind of a big deal. The problem is, and a lot of people seem to miss this point, if you are anywhere near home you probably already have a fairly good idea of things around you. At least the interesting things. And you know how to read the signs and how to find your way around.

It’s when you are out of your home range however that mobile location-based-apps can be enormously valuable. Google maps are a lifesaver when trying to find directions abroad. On top of maps there’s a wealth of apps that can help you find good restaurants, interesting sights, hotel deals etc. In an ancient city like Rome, the place is absolutely soaking in history and it absolutely cries out for augmented reality applications to let you visualize or at least understand more about the history and architecture of almost anyplace you might be standing.

As it stands now, this market, for Canadians doesn’t exist. At current roaming rates it’s quite literally cheaper to buy your phone a seat on AirCanada and fly it return back to Canada than it is to share or stream a mere 25MB of data to your friends (say 10 digital pictures or a couple minutes of streaming qik video). And buying a local SIM is little help when the vast majority of phones are sold locked (or CDMA for that matter).

For services this valuable it makes sense to charge a little for it. We pay $30 for a month of data in Canada, it wouldn’t be unreasonable to charge another $30/week for the convenience of data on the road. In reality though, actual roaming rates are a thousand times higher than this.

It’s time for this to change.

addendum: How do we fix it? Well at best Canadian carrier policies or anything Canadian regulators could do covers only half the problem. It may take cross-border co-operation or regulation (as in the EU), or perhaps competition from other technologies (global standards on open spectrum anyone?).

  • Colin_Pye
    Don't forget about the joy of non-roaming within this country!

    I'm near Halifax, in Nova Scotia. Let's say I go and visit a friend in Vancouver. If I call their cell from my cell, I pay for a local call. That's where the good news ends.

    If they call me back, and I answer, they get billed for a long distance call to Halifax. To add insult to injury, I also get charged for a long distance call, from Halifax (where their call ended up) to my phone in Vancouver! If I don't answer, and it goes to voice mail, they still have long distance charges to Halifax, and I would get long distance charges to Halifax to pick up the voice mail.

    There was a way around it, before the carriers decided to get rid of it. The person calling the phone from another area would dial a "roamer number", generally one of the local cellular exchanges, and 7626 (it spells out ROAM). You would get a second dial tone, where you dial the 10-digit phone number, and if the phone is in the local calling area, your call rings through to the cell phone, all at local non-long-distance calling rates. If you aren't in range, the call doesn't go through.

    There was another side effect. If a friend from home had a great long-distance package, they could make a long-distance call to a roamer number where you were visiting, and you would just get charged your regular airtime charges, with the caller picking up any applicable long distance charges.

    As my use of past tense suggests, the cell companies got rid of the roamer numbers, so that if I were in Vancouver, someone in the same room could call me, and the phone company would collect not one, but two long distance charges for a local call!

    I recently had a call with a Customer Service person about just this sort of thing, and they just couldn't understand why one wouldn't be happy to pay two long-distance charges for a single local call. Their response was "We don't have roaming charges within Canada any more, so why should we have that roaming thing?" They also thought it was fair and just that if I called you, it would be a local call, but if you called me, we *BOTH* would have to pay long distance to the other side of the country, even if we were in the same room! I don't know where they find those rocket scientists/brain surgeons/other really smart people to fill their customer service positions.
  • tony montana
    Although the rates are still crap rogers introduced travel packs for roaming that make the rates a little better (the 25MB you mentioned would be 100$ and then 4$/mb over)
  • jmccallum
    Might want to check out our site www.roamforce.com for Carrier International SIM Cards to reduce costs when roaming to solve this exact problem. (full disclosure - i am the product manager for RoamForce)
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  • Dan222
    Well, if there are countries out there with unlimited postpaid data plans, some enterprising hostel or travel agent would be smart to sign up and then rent SIMs out by the week. It might even work with limited plans as long as the network can properly report data usage and deposits can be worked out.

    If it works for cars, then why not SIMs?

    Too bad muni-wifi never really panned out.
  • anonymous
    Unlocked phones seem like the easy answer.
  • tpurves
    Not as easy as you'd think. Many countries (Canada included) offer no pre-paid SIM cards or other prepaid options with data. Not much help if you are in country for a few days or a week but the shortest data plan you can buy is a one year contract.
  • cedriccanu
    One friend did get data with a prepaid account. It had required to contact the regulator to intervene. I just us postpaid with no contract. Rogers charge me for every thing by the minute even sms from them. I always get two when I get a voice mail. They act like bandits.
  • Preet
    I pick up a pay as you go phone (or just a SIM card) in the foreign land. I now have SIMs for 8 countries. Much much cheaper.
  • auxonic
    It's not only bad, but it's getting worse. The trend over the last year or so has been towards the US being "international" for text messages and the roaming rates there are higher than they've ever been. Considering that most of us are a "Hey, you wanna go shopping in Syracuse?" away from being in the states something has to be done.
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