Free to roam this summer, but beware the hidden traps

Chiara Cavaglieri and Julian Knight look for ways of cutting the cost of using a mobile abroad

Many consumers are still unaware of the significant charges they can face when using their mobiles abroad this summer. The long-awaited price caps from the European Commission came into force at the beginning of the month.

Network operators have been busy texting Britons flying abroad telling them that roaming charges – a fee for moving between continental mobile network operators – have been abolished.

But the danger is that consumers will take their eye off the ball and be stung with high fees levied on other services while holidaying in the EU. "Despite the abolition of roaming charges, even relatively simple operations can lead to an expensive bill when you return home," says James Parker, mobile phone expert at price comparison service Moneysupermarket.com. "For instance, not only do customers pay to make calls but they also pay to receive them."

Under the new EU-imposed price regime, operators cannot charge more than 43 cents (37p) per minute for calls made within the EU. Receiving a call has been capped at 19 cents and will fall even further to 11 cents in July 2011 and texting can cost no more than 11 cents. While these moves are in the right direction, the caps are still high and charges still vary from one provider to the next. It is also worth noting that the price caps are in euros so the actual cost to Britons will vary along with the sterling/euro exchange rate.

Vodafone customers are already safe in the knowledge, for the next few weeks at least, that they can call and text abroad as they would at home after the company waived roaming charges until 31 August. Under the summer promotion, customers can make calls using any minutes or texts from their bundles, in 35 European countries as well as Australia and New Zealand, without paying the usual connection fee of 75p. To take advantage of the promotion, customers must opt into the Vodafone Passport scheme. Customers can do this by texting "passport" to 2345 (pay-as-you-go customers) or 9788 (monthly billed customers).

At the other end of the spectrum, 3 Mobile recently withdrew its Like Home free roaming plan which allowed customers to use their inclusive minutes and texts in sister networks in Australia, Austria, Denmark, Hong Kong, Italy, Ireland and Sweden. "Like Home has been great for a small group of people, but it wasn't fair to our wider customer base," says Hugh Davies, director of corporate affairs at 3 Mobile.

The move means that despite the EU caps, some 3 customers now face increased bills when using their mobiles abroad. The network has replaced Like Home with a flat rate of 34p per minute for outgoing calls, 15p for incoming calls and 11p per text. While this has been an unfortunate move for some 3 customers, compared with T-Mobile, which increased outgoing calling rates in Europe to 43p per minute, these charges are relatively cheap. However, outside of Europe, 3 proves less than competitive and charges a whopping £1.40 for calls made in Australia and in the US.

One way to reduce costs is to opt for travel add-ons or bundles which, with the exception of 3, are offered by all of the major networks. T-Mobile has a range of packages including the Euroboosters, costing from £5 to £30 for a travel allowance in selected countries. The Euro 10 Booster, for example, costs £10 and allows customers to make up to 39 minutes of calls, or receive up to 78 minutes of calls or send up to 60 texts. Similarly, O2 has its My Europe Extra package costing £10 per month for calls costing just 25p per minute in most European countries and free incoming calls. Orange customers should enquire after the Favourite Countries bundle, offering cheaper calls to France, Spain, Greece, Ireland or Belgium.

Anyone travelling outside of the EU, will find that charges vary widely and may well be extremely costly. However, international SIM cards, which can be purchased from sites such as Sim4Travel.com or gosim.com, can be a useful way to cut costs. These typically allow consumers to receive calls and texts for free and offer heavily reduced call rates in comparison to regular network providers' rates.

These are particularly useful for travellers wishing to spend a long time out of the UK or those who are likely to use their phone a good deal. Like domestic pay-as-you-go mobile phone offers, some international SIM card providers offer bundles of phone minutes and texts. International SIM cards are even a viable option in Europe as the price of minutes and texts is usually lower than UK providers offer even after the capping. Other alternatives include using phone cards when on holiday or even voice over internet protocol (VoIP) such as Skype for free or low cost internet calls.

Using mobile internet access abroad is by far the quickest way to rack up an exorbitant bill and there have been reports of people unwittingly spending thousands of pounds. As part of the EU legislation, a wholesale cap of €1 per megabyte on the price of downloading data abroad from a mobile has also been introduced and from July 2011 will be capped at 50 cents.

Mr Davies argues that this cap is still too high and that there is still a long way to go until consumers see a fair price for using the internet on their phones. "We'll push as far as we can for cheaper wholesale data. We still believe that the prices can come down much more," he says.

At the moment, 3 is offering the best internet access rates in the EU at £1.25 per MB and Vodafone offers 24 hours of internet access up to 50MB in Europe for £9.99. "If you can't do without, look at getting a local SIM card that allows you to access the internet on your phone at a local rate. Local SIMs are also great for those who often travel to the same place," says Mr Parker.

There are some simple steps to reduce your mobile internet usage abroad, including turning off images when browsing, using standard webmail services such as Googlemail rather than programmes such as Outlook and don't sign up too automatic downloads that can run to hundreds of megabytes.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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