International data rates continue to be costly for no apparent reason

Recently, Bloomberg did an excellent story detailing the absurdity of international roaming rates in today’s marketplace. Even with wireless carriers offering unlimited calling and text messages at semi-reasonable rates within the United States borders, the carriers continue charging customers “by the minute for calls, fees for each text, and outrageous prices per megabyte.”

Americans visiting Europe can spend at least $150 for a 1-gigabyte bundle of international data. That’s enough to cover some app downloads, a few hours of music on Pandora, a YouTube video or two, and a week’s worth of e-mail. Those who forget to plan ahead would pay about $20,000 for the same amount of data, according to the carriers’ published roaming rates. Back home, a gig costs about $10. – Bloomberg

These ridiculously high prices are the reason that sites like this have written in the past about wireless customers running up a $750 international data roaming bill in one minute or receiving a $200,000 bill after spending two weeks in Canada. In fact, as one report notes, Americans who go to Europe or Asia and use strictly hotel/cafe Wi-Fi will still get hit with almost $200 in data roaming charges.

So, why are these prices so high? Hasn’t 4G technology essentially removed major roaming issues around the world? Of course. But why would carriers change something that is netting them millions with little to no competition?

But without an incentive, don’t expect carriers to voluntarily blow up an insanely profitable side business. …international fees are a consistent driver of profit that expands as more people become addicted to data-hungry smartphones. – Bloomberg

Considering we continue to see story after story after story of consumers being hit with high bills (sometimes ranging in the thousands of dollars), carriers will continue this pattern until they are forced to make changes legally.

Anyone remember how much wireless carriers HEAVILY resisted sending customers data or billing alert through text message even though other carriers around the world had been doing such basic consumer moves for years? Say, why did carriers agree to these text alerts?

After the FCC threatened to pass regulations on the matter, carriers agreed to cooperate with these voluntary guidelines. The guidelines are not quite as tough as rules passed in the European Union, which allow users to automatically set a maximum monthly expenditure on data that it is impossible for them to move past without express authorization. – DSLReports

That damn FCC strikes again with their heavy-handed government interference!

So, let’s review:

• Customer in America who is staying in America and uses about 6GB’s per month = $70 plans available
• Customer in America who is traveling outside the country and uses 6GB’s in a month = $120,000 ($20 per megabyte).

Not to worry though as Verizon has a perfectly good explanation for this insanity.

“It’s a complex system; there’s lots of different layers that determine rates, like regulatory and tax issues in different countries,” says Debra Lewis, a Verizon spokeswoman. “Our goal, as always, is to provide the best value.”  – Bloomberg

Which Verizon is doing by jacking up the price by 171,000%.

As is often the case, most carriers around the world seem to have figured out how to not screw consumers with insanely high costs. In Japan, the country’s largest wireless carrier caps the cost that customers will pay at $25 a day to avoid gouging. In Europe, subscribers to Vodafone pay a flat fee of $8 per day and can use as much voice and data within Europe.

Instead, we are left with customers dealing with issues such as this:

John Ellis, an adjunct professor of anesthesiology and critical care at the University of Pennsylvania, returned home from a trip to China to a $2,367 phone bill for downloaded data, even though he carefully tracked his usage. And one Texas A&M University employee got an even bigger welcome home gift after a trip abroad: a $10,000 cellular data bill. – Wall Street Journal

Although T-Mobile was the first national carrier to announce that they were not charging for roaming around the world, this only applies to 2G data, which will not allow for anything other than basic e-mail and web-browsing.