Telecom's smart move

Here at TUANZ we’ve long lobbied for better roaming rates for mobile users.

The idea of having a smartphone and being able to use GPS, connect with distant family and friends, send and receive email and all the myriad of other things that have come about since Steve said “Build me a phone with no buttons” has been one of the great boons of the last few years and every time I use my tablet or smartphone I feel a little bit Trek inside.

Having to dumb it down, rip out its still-beating heart and throw it on the concourse floor every time I disembark in a distant land has always been something of an anathema to me. Every time I forced a local SIM in my phone a little piece of me died inside.

I may be overselling it but data roaming charges really used to get my goat.

I was delighted when Telecom CEO  Simon Moutter told me he was going to do something about it. He’d just started back at Big Blue after his time at Auckland Airport and I think he saw there just what a farce roaming charges had become. Charging customers $20,000 for a product that should only cost $10 was clearly bonkers, but nobody seemed willing to tackle the issue head on.

Sure, Vodafone had introduced its Data Angel programme which warned users when their bill was getting excessive, but I always thought that didn’t really address the problem of the price.

Moutter’s solution – a $6 flat rate for roamers who then go on to use data out of their existing bundle ($10 if you’re roaming somewhere other than Australia) has a simplicity about it that I really like. It’s hard to not understand “you pay $6 on top of your usual amount and then just carry on as you normally do”.

The danger, of course, was that customers wouldn’t bother using the service, that uptake would stay about the same and that Telecom would have to foot the bill for international data charges from the various foreign network operators. “It would leave us a long way under water” was how Moutter put it at last night’s After Five’s session in Wellington.

Instead, users responded with a nearly 200% increase in data consumption while roaming, both in Australia and the other destinations covered by the scheme.

This is tremendous news as it reinforces what we’ve been saying all along. Make the price reasonable and people will actually pay for a product. Sure, you can still get a better deal if you put a local SIM in your phone on arrival, but the hassle of that (losing contact numbers, remembering APN settings for the return journey and all the rest of it) isn’t worth the extra savings for most people.

Moutter says this is part of the new approach to competition at Telecom. Instead of “walking backwards slowly” defending market share and generally being as negative as possible to the environment around, Moutter wants Telecom to take a leadership position in the market and drive it forward. Given how quickly he got the data roaming package introduced, Telecom is certainly showing itself able to do that.

So full credit to Telecom for cutting to the chase and fixing what has been a major problem for TUANZ members for a long time and now, onward to see what’s next. Moutter says the company won’t be competing with over the top providers because there’s no way he could foot it with an Apple or a Google in that market. Instead, he says the future of telco providers is in bytes – it’s data all the way and eventually he’ll be overseeing a company that doesn’t sell minutes of calling or TXT messages. That’s an exciting proposition and hearing it from the CEO of Telecom tells me that if there’s one thing the telco market doesn’t lack for it’s surprises.