Why Is The Roaming Free?

[Przemolog]

Originally Posted by snaimon

The more I think about it, the more I think that most costs are simply FIXED.
(...)
The trick is to drive up capacity usage; the more usage, the more revenue opportunities the company has.

Stan, I'm completely not involved professionally in the mobile business but I think that your thoughts about operators costs may be correct.

Originally Posted by snaimon

I think one really has to wonder about COSTS. For instance, some German carriers are offering 5 and 6 cents / minute INNER-NET prepaid calls. Don't know about postpaid, but it would not surprise me if there are offers with very low network internal calling. And you don't think they are still making a profit on those calls? If all calls were made within the network, would that cell company not make a profit?

I'm also almost sure that mobile companies would make profit only on inner-network calls for 5 cents/min.

Originally Posted by snaimon

And even when the called party is roaming!

In theory, it might be so. But roaming always involves using the mobile infrastructure on two carriers instead of one. Why should the carrier pass some of its revenue to its roaming partner in order to provide free incoming calls, if it can keep it all and
charge extra the customer for incoming calls?

Originally Posted by snaimon

Is the roamer REALLY a burden or additional cost on either network? I don't think so at least if you accept my line of thinking above that most costs are fixed.

Neither burden nor additional cost. However, it uses the stranger network and must pay for it.

Originally Posted by snaimon

In CPP countires, the price to receive the call is built in to the caller pricing for NATIONAL calls. Who gets the revenue when the national user roams? Is it split between the two parties (say Germany and France, when a German visits France and roams and receives a call from his home country)? Must be. Just another revenue raising opportunity!

The German caller is paying his regular rate, perhaps as low a 5 cents per minute inner network. The caller cannot be expected to know if the called party is roaming or at home. In terms of fairness, ideally, the caller should pay an international rate to call his buddy roaming in France, but he does not.

What is your point? Do you think that the German carrier should pass over the Rhine some share of the 5 cents it gets from the calling party to its French partner? And it's because of the fact that a German customer roams in France doesn't affect the costs of either of the two operators? And moreover, one could even say that the German operator gets a chance to make some extra profits because the called party doesn't occupy its radio channels, but French ones

Originally Posted by snaimon

Another idea I have is that, since the free roamers are relatively small (Liechtenstein, Estonia, Iceland, IOM) with small indigenous populations, the big guys did not fear large revenue losses and granted "most favored roaming nation" status.

Do you think that such kind of "roaming status" really exists? :unsure:

Originally Posted by snaimon

Of course, the big guys never dreamed that the SIMs would be sold internationally. If the concept of free roamings takes off and puts a real dent into the big guys' roaming revenues, I would bet any money those most favored free-roamer nations will lose their FREE INBOUNDs in a heartbeat.

I believe that big guys are not really afraid of losing revenues because of international "free roaming" SIMs because they are aware of their disadvantages.
High initial cost, new foreign number, "strange" making calls, handset compatibility issues, lack of support in the customer's language - all this makes those products not so attractive as they might look at first sight.
I think that international SIMs are something like calling cards. Why do calling cards exist at all? Dialing an access number, PIN and destination number is always more complicated and takes more time than dialling just the destination number. PINless solution don't make it much shorter. My supposition is that big guys charge a lot for "just dial the number" convenience. "Usage complications" related with using international SIMs, calling cards (and callback services like CBW and any other workarounds for high rates....) IMHO make the products under consideration pretty uncompetitive

Originally Posted by snaimon

Somehow, someway, the outbound calls from Liechtenstein, Estonia, Iceland, IOM and the international interconnect fees to Liechtenstein, Estonia, Iceland, IOM from the nation networks are paying for free inbounds.

In case of Manx SIMs, "almost international" interconnect fees between UK and IoM may be real importance. I have a strong impression that many Manx SIMs are strongly positioned for UK users

[RTuesday]

Originally Posted by Effendi

It could be free also for Manx Telecom if they wanted so. But all "normal" carriers make us pay everywhere, so does Manx too,

Contract (post paid) direct customers of Manx Telecom now get free incoming calls while roaming in the UK, Ireland and Channel Islands.

So, yes, they can do it they want to!

[MATHA531]

""Usage complications" related with using international SIMs, calling cards (and callback services like CBW and any other workarounds for high rates....) IMHO make the products under consideration pretty uncompetitive "

Well let's see the usage complications...I have programmed my cbw trigger number into one touch dialing (#5 in my case) so let's see..I press down 5...hm...about 10 seconds later the first call back comes so I press the end call button...hm 10 seconds later the callback from cbw comes so I press the green answer button...a total of 3 buttons and then enter the number and BTW I don't even have to press +...hardly overwhelmingly inconvenient.

[snaimon]

Originally Posted by Przemolog

1. In theory, it might be so. But roaming always involves using the mobile infrastructure on two carriers instead of one. Why should the carrier pass some of its revenue to its roaming partner in order to provide free incoming calls, if it can keep it all and
charge extra the customer for incoming calls?


2. Neither burden nor additional cost. However, it uses the stranger network and must pay for it.


3. What is your point? Do you think that the German carrier should pass over the Rhine some share of the 5 cents it gets from the calling party to its French partner? And it's because of the fact that a German customer roams in France doesn't affect the costs of either of the two operators? And moreover, one could even say that the German operator gets a chance to make some extra profits because the called party doesn't occupy its radio channels, but French ones


4. Do you think that such kind of "roaming status" really exists?


5. I believe that big guys are not really afraid of losing revenues because of international "free roaming" SIMs because they are aware of their disadvantages.
High initial cost, new foreign number, "strange" making calls, handset compatibility issues, lack of support in the customer's language - all this makes those products not so attractive as they might look at first sight.

I think that international SIMs are something like calling cards. Why do calling cards exist at all? Dialing an access number, PIN and destination number is always more complicated and takes more time than dialling just the destination number. PINless solution don't make it much shorter. My supposition is that big guys charge a lot for "just dial the number" convenience. "Usage complications" related with using international SIMs, calling cards (and callback services like CBW and any other workarounds for high rates....) IMHO make the products under consideration pretty uncompetitive

Przemolog:

Replies to the ?s and apparent disagreements.

1. Indeed, two carriers, possibly more. In CPP for national countries, all incoming are free regardless of national network if national roaming is allowed, true? In DE, I believe O2 roams on D1, for intstance. This is not true for US, BTW. Some, but not all, carriers charge extra for roaming or they don't allow roaming at all. I would agree that, unless the carriers agree to some kind of revenue sharing, there is no reason why EITHER the home country carrier of the roaming party or the network on which the roamer is registered in the foreign country should share revenues.

Why? How is SFR to bill the German's E+ account without going thru E+ to collect? You think SFR knows the balance on the E+ account and bills the user's account directly? I find that very hard to believe, but it may be true. There must be some kind of handshake between the two networks for communication AND billing info.

See also below.

2. "must pay" as in ALWAYS? Why? We have several examples of the international cards where the roamer does not pay for inbound, so "must pay" cannot be 100 % correct. Certainly, apart from the internationals with FREE INBOUND, the roamer DOES pay. And then you have Vodafon where you can find reduced inbound (and outbound) rates as long as you stay on the Vodafon network while roaming. And, if you agree there is technically no additional burden or cost on the networks other than doing whatever is needed for the interconnect, then the fact that the non-national roamer receives a call outside his national borders is simply another revenue opportunity or event, and a lucrative one at that. The major alternatives are: (1) keep phone off; (2) use phone and pay; (3) use another SIM with all the disadvantages other than low price to receive and make calls for the roamer. [And I might add that one should consider ALL costs; I refilled a my Malta Go twice for ~50 Euros over two years, made some calls, sents some SMSs, had some security while there and sold the thing for 7 Euros leaving a 45 Euro balance on the SIM. Not very smart, true? Also, when you consider I paid about the same for the Vodafon Malta card AND LOST IT OUTRIGHT, I took a real bath on these cards.]

And obviously, the interconnections work on landlines for international calls, so the costs are already FIXED for the most part as postulated above. BUT there must be a billing exchange from the host country network to the origin country network. I am lead to believe these intra-network bookings happen quite rapidly, so I am guessing there are revenue sharing agreements established to accomodate this. How else could WIND know a German's E+ account balance and bill him for the call received (or made)? Which brings up an interesting quesiton of if an account balance can actually go negative especially while roaming? I thought I read over @ T-MO DE (one of the PDFs) that negative balances could occur in just such roamking instances and that a refill would be needed to make up for the negative balance.


3. I guess my point is this: when you dial from your home phone to a foreign destination, you are expecting to pay more for that call due to the greater distance or use of the satellite or foreign network. That is certainly NOT TRUE when you call another national mobile from within your country. And, of course, the CALLER in your CPP coutnries does not pay extra - ever, as long as the caller is dialing and is registered on his or a national network. Since CPP rules out the collection of any additional fees (I think so, anyway) in this case (call to foreign destination), it is understandable and rational that the receiving party must pay something additional for the interconnect and extra distance. One can of course dispute how much EXTRA that fee should be. And we are right back to our main topic about how can UM, 09, etc offer free inbound in 80 (whatever) countries!


4. Just guessing, but it seems that this kind of "roaming status" does exit. Certainly, UM and the like do not have that much market clout to dictate to the biggies that inbound should be free, do they? So why would the biggies treat them differently from their biggie rivals? What explanations have been given or do you have?


5. You may be correct. At any rate, it does not appear that the big guys appear ready to shut off UM, 09, etc. just yet.

Thanks for the lively discussion!

Stan

[Triband81]

Originally Posted by snaimon

In DE, I believe O2 roams on D1, for intstance. This is not true for US, BTW.

Thanks for the lively discussion!

Stan

The O2-T-Mobile domestic roaming agreement dates back to the days when O2's predecessor Viag Interkom was constructing their GSM 1800 network. Viag simply wasn't able to build out its network as widely like Vodafone, T-Mobile and E+ did. So they looked to expand their domestic coverage by working together with an established provider.

Roaming is possible in certain areas only and as such only certain T-Mobile LACs (Local Area Codes) are opened up to O2 customers.

[snaimon]

Nonetheless, some domestic roaming IS possible AT NO EXTRA COST in Germany. It may not be universal coverage, but roaming is possible. I suspect such agreements exist in other countries, AGAIN, WITHOUT EXTRA CHARGE and with FREE INBOUND.

So, if this kind of roaming happens within a country/multiple countries, WHY CAN'T IT HAPPEN across borders betweeen foreign countries?

GREED is my quick answer.

[Przemolog]

Originally Posted by MATHA531

""Usage complications" related with using international SIMs, calling cards (and callback services like CBW and any other workarounds for high rates....) IMHO make the products under consideration pretty uncompetitive "

Well let's see the usage complications...I have programmed my cbw trigger number into one touch dialing (#5 in my case) so let's see..I press down 5...hm...about 10 seconds later the first call back comes so I press the end call button...hm 10 seconds later the callback from cbw comes so I press the green answer button...a total of 3 buttons and then enter the number and BTW I don't even have to press +...hardly overwhelmingly inconvenient.

Matha, all what you described is not out of capabilities of most human beings, but direct dialing of a destination number (or "extracting" it from the phone memory) is still simplier and faster . When I told about "usage complications", I was also inspired by this statement from the Blauworld thread (by Bossman):
http://www.prepaidgsm.net/forum/index.php?...topic=1508&st=0

(quote)
See, a lot of people in the US have never (and probably will never have a needd to) dial an international number. So, they tend to get confused and not dial it correctly when they have to dial an international number.
(/quote)

If there are people who don't know (and, I suppose, in some cases possibly don't even want to learn) how to dial foreign numbers directly, how can they consider callbacks or calling cards convienent ? I realise that I exaggerate a little, but I believe that many people are just lazy, even if it costs them a lot .

[Przemolog]

Originally Posted by snaimon

Nonetheless, some domestic roaming IS possible AT NO EXTRA COST in Germany. It may not be universal coverage, but roaming is possible. I suspect such agreements exist in other countries, AGAIN, WITHOUT EXTRA CHARGE and with FREE INBOUND.

So, if this kind of roaming happens within a country/multiple countries, WHY CAN'T IT HAPPEN across borders betweeen foreign countries?

GREED is my quick answer.

I must say I forgot about national roaming (perhaps because it doesn't work yet in my country ).

You're right that in European countries there are many national roamings in which either the "large-coverage" operator allows using SIMs of a "low-coverage" operator or a virtual operator (MVNO) and national roamers don't pay for incoming calls. Moreover, "low-coverage" network users usually pay the same rates for outgoing ceonnections no matter which towers they use (of course things may be different see e.g Teletopia in Norway: http://www.prepaidgsm.net/en/norvegia/teletopia.html) .

You ask why end-user pricing in national roaming is better than in international? My answer is not that ops are less greedy "at home" :P. I think that there may be two reasons in question. The first one is that national regulators might not allow national roaming pricing "constructed" according to usual international roaming rules. The second one, is "the force of the marke"t: who would use a SIM from an operator with rates significantly worse because of national roaming? Customers just expect to pay moreless the same rates as without national roaming, in particular they expect free incoming calls in their home countries.

As to international roaming, there's no "international regulator" to force changing the rules and customers expect (and "accept", in the sense laws of nature are "accepted" too :P) high rates.... :whistle:
No way out from this swamp. Even if the EC forces eventually to lower roaming rates, we must remember that large part of Europe is not-EU and what about the rest of the world ....?

[unobtrusive]

I used to work in the prepaid billing dept of a mobile operator, so I think I can add a bit more detail to this discussion.

Firstly, all mobile operators (and fixed operators even) charge a termination fee to the originating operator of an inbound call. In Greece for example, that fee is currently 0.12 EUR for Cosmote and Vodafone, 0.125 EUR for TIM and 0.17 EUR for Q Telecom. These fees are a major source of revenue and are charged no matter where the call originates, except possibly in the case of large operators like Vodafone. A call from Vodafone UK to Vodafone Greece for example, may either avoid a termination charge, or more likely, the termination charge is made but the money stays within the Vodafone group anyway.

Now taking the example of an International SIM that allows free inbound to Greece - as long as the revenue to the originating operator for the incoming call to its own network is at least 0.125 EUR then free inbound can be offered to the 3 major networks without suffering any financial loss. If the inbound revenue is higher than 0.125, or if the destination networks termination fee is lower than 0.125 then a profit is made.

I think this goes a long way to explaining the very large price increases a lot of operators now charge on calls to Leichenstein mobile numbers.

On the subject of how prepaid international roaming can be offered and whether an operator can know the balance of another operators customer, this is a bit more complicated.

First I'll take the case of an incoming roaming call. This can be offered simply because the call must pass through the users home network and the home network stores the balance of the users account. When that balance reaches 0 the call can be terminated and users profile changed to disallow further calls.

A lot of operators will allow incoming calls on prepaid but either not allow outgoing calls at all, only allow calls from some operators with which they have SS7 links, only allow outgoing calls when USSD codes are used and the home operator originates the call (and so can monitor the customers balance) or in some cases only allow outgoing roaming calls when they are seperately billed to a credit card, removing the need for realtime billing.

In the case of an outgoing call where the 2 operators involved have an IN/SS7 link, IN services are used to allocate time slices to the roaming user. For example, when the user places a call, a request will be sent to their home network to verify that the user has sufficient credit to initiate the call, which usually with a 30 second or 1 minute minimum duration. After the initial duration has been reached, a further request will be sent to verify the user has enough credit for a further x seconds.

This process is repeated throughout the call until either the call is terminated or the user runs out of credit, with the home operators billing system charging for the time slices as appropriate. There is no sharing of customers balance between operators.

In some cases it is not possible for operators to provide roaming this way due to the combination of network and system latency. Usually a request must be answered within 100ms and the combination of network latency (e.g Internet) as well as delays caused by system load (CPU, database, disks) can exceed this time.

[snaimon]

Originally Posted by unobtrusive

Now taking the example of an International SIM that allows free inbound to Greece - as long as the revenue to the originating operator for the incoming call to its own network is at least 0.125 EUR then free inbound can be offered to the 3 major networks without suffering any financial loss. If the inbound revenue is higher than 0.125, or if the destination networks termination fee is lower than 0.125 then a profit is made.

First I'll take the case of an incoming roaming call. This can be offered simply because the call must pass through the users home network and the home network stores the balance of the users account. When that balance reaches 0 the call can be terminated and users profile changed to disallow further calls.

Thanks for the detail. I am sorry to be so dense, but I have a few questions.

1. For the international SIM, say if I am in Germany and registered on T-Mobile with my UM SIM calling to Greece -- say to my wife on a UM card. What firm is "the originating operator"? T-MO, UM or the Greek firm receiving?

On UM, the revenue to UM - prpbably shared with the actual service provider - is 25 ecents to setup and 39 ecents per minute. Now, that certainly will cover the termination fees in Greece and allow everyone a profit. But why should all the Greek operators allow UM free inbound?

Consider if I used my DE T-Mobile SIM instead where I am guessing I would owe DE T-Mo upwards of 99 ecents per minute AND the Greek operator handling the call in Greece does not allow free inbound? If my wife was using our DE T-Mobile cards and received a call in Greece, my DE T-mobile balance is debited by 79 ecents -- whether I call from the UM card or a landline or pay the > 99 ecents from my other DE T-Mobile card. Where is the logic?

How is it possible that UM callers enjoy FREE inbound and DE T-MO users don't?

2. I don't understand how, if I am in France with my German T-MO card, the call "must pass through the users home network". I am registered on SFR, right? Someone in France using SFR dials me; how does that call pass through Germany? Why? As I see it , the only way "passing thru" can happen is if SFR communicates behind the scenes with the German host network. Now my German cards were out of phone time but still in message time and they registered here in the US and I believe I could receive SMS messages, retrieve my balance and add money to the account. I could not dial out, however, as the call was not allowed. There is bound to be on the SIM card a set of approved roaming networks. I can understand the "behind the scenes" communication to check balances, but I would not equate that with your descripiton - "the call must pass through the users home network" statement.

3. You do not address the possibility of negative balances; I THOUGHT I read this in DE T-MO literature about prepaid accounts, especially in connection with international roaming.

Stan