Roaming fees and opportunities for cost-effective solutions – study
Tarifica, a leading provider of data, software, and data analytics to the worldwide telecom industry, has released its latest Tarifica Data Dive, focusing on the complexities of international roaming fees. The analysis, titled “The Price of Traveling Abroad: Navigating the Complexities of International Roaming Fees,” provides an in-depth look at the challenges and costs associated with using mobile services while traveling internationally. Roaming fees cost-effective solutions
With the resurgence of international travel post-pandemic, understanding the cost implications of international roaming is more critical than ever. Using data from Tarifica’s Telecom Pricing Intelligence Platform, the study employs the “rational consumer” methodology and multiple usage profiles to compare the cost of add-on packages for travel to the United States. The analysis highlights examples from Australia, Italy, and Japan to illustrate the varying costs and structures across different regions.
Soichi Nakajima, Tarifica’s Vice President of Data and Analysis, emphasized the importance of this analysis for both consumers and telecom providers: “Our findings reveal that international roaming fees can vary widely, and the lack of transparency often leads to unexpected charges for travelers.” Roaming fees cost-effective solutions
General Methodology
Comparing telecommunication pricing across different countries (and even across providers within the same country) is notoriously difficult, and roaming is not an exception. Consumer needs vary depending on the market and region, as well as on personal circumstances and travel destinations, while operator plans offer a diverse range of included services and pricing characteristics. The specific travel needs of a given consumer often end up more important than price alone.
Based on this methodology, and to keep things relatively simple, Tarifica selected two profiles; a user requiring 3GB over 3 days, and a user requiring 10GB over 14 days. For each profile, Tarifica compared the cost of add-on packages for travel to the US from Australia, Italy, and Japan, assuming the user takes the least expensive possible combination of roaming packages from the MNOs (mobile network operators) in their respective countries.
The report shows that pay-per-use roaming is typically the most expensive option, prompting a focus on add-on roaming packages.
Traveling to the US – From Australia, Italy and Japan
Across all countries studied, opting for pay-per-use roaming while traveling is typically the most expensive option, leading our focus to shift to add-on roaming packages. The chart below identifies the least expensive add-on roaming package for each profile in the three countries.
These results reveal some interesting takeaways, even when comparing just three countries. Overall, we see that Japan is the most expensive for both profiles. For the least expensive, Australia is the cheapest for the “3GB over 3 days” profile, while Italy offers the best price for the “10GB over 14 days” profile. It is also interesting to note that all three countries structure their roaming add-ons differently.
For Rakuten of Japan, the package includes 1GB for 500 JPY, valid for 31 days. Thus, the package needs to be bought three times for the 3-day profile and 10 times for the 14-day profile to meet the required amount of GBs.
For Iliad of Italy, the package is €4.99 for 30 days, including 5GB, so 1 pack is enough for both the 3-day and 14-day profile in terms of validity days. However, the latter requires the user to buy two packages to meet the 10GB requirement.
Finally, for Optus in Australia, the daily 5 AUD package includes 5GB, meaning this package needs to be bought three times for the 3-day profile. For the 14-day profile, instead of buying the daily roaming package 14 times, the user can purchase the 14-day package, which also includes 10GB, for a much lower price.
Built-In Roaming
The above analysis compares the best use of roaming add-on packages. However, there are cases where some of the standard mobile plans also include some roaming data. For example, travelers visiting the United States from Canada and Mexico may find that they already have GBs available for roaming in the US included in their monthly postpaid plan.
Additionally, subscribers of Japan’s SoftBank also have completely free roaming when traveling to the US, due to SoftBank’s 2012 purchase of the US-based MNO Sprint, which has since been acquired by T-Mobile. Initially, SoftBank had made roaming free for Japanese travelers to the US on the then-Sprint network only, but after the merger with T-Mobile, free roaming was extended to cover all three MNOs in the US.
Finally, in the European Union, the “Roam Like at Home” regulation, which has been in place since 2017, allows travelers within the EU and EEA (European Economic Area) to call, text, and use data without incurring any additional charges. The latest update to this rule, made in 2022, extended it until 2032.
However, free-roaming services are still generally the exception rather than the rule; even multi-national heavyweights with networks in multiple countries do not offer free roaming across their own networks (unless required to by law, as in the EU).
Mr. Nakajima further added, “Telecom providers have a significant opportunity to build customer loyalty by addressing the pain points associated with international roaming. Our analysis provides a roadmap for providers to develop more user-friendly and cost-effective roaming solutions.”
Conclusion Roaming fees cost-effective solutions
The cost of remaining connected while traveling remains a complex and competitive issue. We have seen that the cost of using one’s mobile while traveling abroad is dependent not only on the traveler’s home country but also on the destination country. For example, most Japanese travelers will generally have to pay more to roam the US. This is true not only when compared to Italians and Australians, as explored in this article, but Tarifica’s Telecom Pricing Intelligence Platform (TPIP) also shows this holds when compared to many other countries as well.
As noted above, some exceptions do exist, such as SoftBank subscribers roaming for free in the US, and the Roam Like at Home regulation in the EU. But while these examples suggest a movement towards more travel-friendly policies, they remain outliers rather than the norm. Even for Europeans, though traveling within the EU and EEA may be free of extra charges, using their mobile on another continent still incurs additional charges for most destinations.
Of course, we are still very far from a world with no roaming fees. But with international travel on the rise, the demand for more affordable roaming is growing, and alternative eSIM providers, such as Airalo, BNESIM, Airhub, and Nomad (just to name a few – here you can find more), are starting to jump in to meet it. MNOs may need to rise to the occasion and offer more competitive roaming options or risk being left behind.
Overall, the analysis indicates that roaming costs vary significantly depending on the home and destination countries. Australian users benefit from the lowest costs for short-term roaming, while Italian users enjoy the best rates for longer stays. Japanese users, on the other hand, encounter the highest roaming expenses. The study underscores the need for telecom operators to offer more competitive and transparent roaming packages to meet the growing demands of international travelers.
