Vodafone raises $5 roaming by 40% and scores own goal

By Steve Biddle, in , posted: 6-Jun-2019 07:43

Vodafone New Zealand have announced that from the 11th July 2019 they are raising the price of their popular $5 Daily Roaming option from $5 per day to $7 per day, a 40% increase.

Unlike roaming packages with other providers, the $5 charge is not a package or plan as such, but merely an arbitary daily charge that allows Vodafone On Account customers to use their included plan voice minutes, SMS messages and mobile data while overseas.

Vodafone say -

We understand the disappointment. However in the five years since we launched Daily Roaming this is the first time we’ve put the price up despite the regular improvements. Although we've had to increase the cost, we're confident that Daily Roaming delivers exceptional value.

Since introduction, we’ve increased the destinations from 23 to over 100, roaming costs in some regions has increased, mobile data usage has tripled but costs have remained constant, plus there’s now more value for customers in our core plans used while roaming.

Mobile roaming is complex – nobody is denying that. Something many people will be unaware of is that mobile data has to be tunneled back from the network in the country you’re visiting back to your your home network, where it then passes through the core network so it can be rated and billed, and then heads back out across the Internet.

It’s for this reason that using data roaming while in Europe for example can lead to a poor customer experience due the fact your data has to travel from Europe to New Zealand which is around 310ms away on a 4G connection (based on optimal routing and allowing 50ms for the 4G layer) and then if the server on the Internet you’re connecting to is based within Europe another 260ms is added as it heads back to the Europe. 560ms in latency while browing the Internet or using an online service will result in noticeable sluggishness.

Costs for providing roaming services have increased as growing numbers of people have decided to roam, and more importantly as data usage while roaming has continued to increase. Dimensioning of links between Vodafone and their roaming hub as well as links between Vodafone and direct bi-lateral roaming partners have all increased.

None of this changes the fact however that actual roaming costs incurred by networks have been in decline for years - I can’t find another example of a network that has actually decided to increase roaming prices. This increase quite frankly looks like a money grab from Vodafone which will raise them several million dollars per year.

As somebody who spends a lot of time traveling overseas (I’ll spend somewhere between 50 and 60 days overseas this year), Vodafone’s $5 daily roaming has kept me a loyal customer despite the fact Vodafone New Zealand under the leadership of former Chief Executive Russell Stanners was like watching a slow motion train wreck. Their profits before people focus in recent years along with cutbacks in capital expenditure has seen aspects of their network such as their 4G coverage now appear very poor in comparison to Spark. Being contactable is important to me, and $5 roaming has been the one thing that has kept me as a customer.

The $2 increase in daily roaming charges isn’t going to break the bank for me. The $100 – $120 extra per year it would cost me to use the service is a pittance compared to the amount I will spend on travel this year. It is however a matter of principle, and will see me seriously look at my options when it comes to both my mobile provider in New Zealand, and whether I go back to making more significant use of local SIM cards when overseas.

What’s surprising about Vodafone’s claims that prices have increased because costs have increased is that their argument falls apart when you look at their Prepay roaming prices which are not increasing – and depending on your usage Prepay roaming prices are already significantly cheaper than using $5 Daily Roaming.

On Account users will now be paying $49 per week just for the privilege of being able to use their included plan minutes, SMS messages, and data while roaming. You’ll pay this $7 daily fee regardless of how much you use your mobile phone – if you don’t use your phone you won’t pay anything, but even if you only send a single TXT message or receive a 1 min phonecall, you’ll automatically now be stung $7 per day for the convenience.

With the Government expected to introduce GST on telecommunications services used overseas from 2020 (currently roaming is and always has been zero rated for GST), we’ll see this $7 increase to $8.05 per day. That’s a big price to pay for something that actually offers nothing at all.

Vodafone Prepay users have several options that see their roaming costs being significantly lower for the average user, and significantly the roaming prices for Prepay users are not increasing. Only want to use data while roaming? 1GB data valid for 7 days will cost you $15. Want some voice minutes and SMS messages thrown in with that? You can get 1GB data, 100 voice minutes (inbound and outbound) and 100 TXT messages for $19.

This usage represents a typical usage amount for a roaming user (who tends to use more data than they do while in NZ, but makes fewer voice calls). It means that a typical On Account user is now paying $49 per week for something that is available to Prepay users for $19.

I would love to pay $19 for a week of roaming on my On Account plan – the allowance on that plan meets my requirements, and it would be a significant saving from the $49 it’s now going to cost me being On Account.

That really just poses one question for Vodafone to answer – why do you think such a big difference is fair? And where is the "exceptional value” you’re claiming daily roaming offers? Right now I’m struggling to see it, and this change looks very much like an own goal to me.

Other related posts:
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Skinny takes FUD to new heights with Vodafone GSM network shutdown billboards.
Are Air New Zealand about to dump their Premium Economy Spaceseat?

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sbiddle's profile

Steve Biddle
New Zealand

I'm an engineer who loves building solutions to solve problems. I'll also a co-founder of the TravelTalk.nz travel site. 

I also love sharing my views and analysis of the tech world on this blog, along with the odd story about aviation and the travel industry.

My interests and skillset include:

*VoIP (Voice over IP). I work with various brands of hardware and PBX's on a daily basis
  -Asterisk (incl PiaF, FreePBX, Elastix)

  -xDSL deployments

*Structured cabling
  -Home/office cabling
  -Phone & Data

*Computer networking
  -Mikrotik hardware
  -WAN/LAN solutions

*Wireless solutions
  -Motel/Hotel hotspot deployments
  -Outdoor wireless deployments, both small and large scale
  -Temporary wireless deployments
*CCTV solutions
  -Analogue and IP

I'm an #avgeek who loves to travel the world (preferably in seat 1A) and stay in nice hotels.

+My views do no represent my employer. I'm sure they'll be happy to give their own if you ask them.

You can contact me here or by email at stevenbiddle@gmail.com