When in Rome...roaming costs should be cheaper

A new charging regime for using mobile phones abroad promises price cuts for customers

Many know the feeling of opening a mobile phone bill after a trip overseas and being hit with huge charges.

Often, it seems that charges have very little to do with the texts sent, time spent on the phone or even content downloaded. Roaming charges are levied by providers for basically keeping you connected when overseas, and have been seen as a pain by consumer groups since their introduction at the start of the mobile phone revolution.

A long-term solution to the costs of mobile roaming charges has been set out by the European Commission. From July 2012, there will be a cap on data roaming charges, bringing the costs down to 40p per megabyte by 2014.

Currently the cost of using your mobile phone to make calls abroad is between 36p and £1.70 per minute, depending on your network provider; and using the internet on your phone can cost up to £1.80 per megabyte. According to guidelines set out by the European Commission, this cost will have fallen to 81p by July 2012 and will then be halved by 2014.

"This has not come a moment too soon," said Ernest Doku, a technology expert at the price comparison service uSwitch.com. "People have been paying extortionate prices for the privilege of using their mobile abroad and millions have been stung by a nasty bill on their return."

The effects of this proposal will mean that by 2014 mobile phones used to download data within the EU will have a cap on the amount that can be charged, although phones used outside the EU will still carry a significantly higher cost.

"People should still note that this ruling doesn't cover popular holiday destinations in Europe such as Turkey, nor many countries further afield," said Mr Doku. "Wherever you are going, it's still well worth contacting your network before you travel to ensure that you fully understand the cost of using your phone while you are away."

While this ruling is going to come as a great relief to frequent smartphone travellers, the proposal will not start coming into effect until 2012, and so those about to embark on their summer holidays should still be wary of extra costs.

Costs of calling home

EU mobile providers will have to lower prices for roaming calls within the EU from July 2012. In details set out by the European Commission, customers will pay no more than 35p a minute for calls made and no more than 11p for any received.

Despite the cap on charges, rates are still high, especially in countries outside the EU. To help overcome these costs, network providers have a variety of different options for reducing your costs while you're away, including sim card extras for both contract and pay-as-you-go customers, and monthly one-off travel bundles.

The cost of using your phone abroad can range between 10p and £1.65 per minute, according to Which? the independent advice service. The cost of making and receiving calls varies dramatically between networks and countries, with no provider offering a consistently low standard across the world.

There are phone packages available such as O2's International Traveller Service and Orange World, which offer overseas reductions on calls, although it is at a charge of up to £5 a month. To avoid paying this fee Which? highlights the free Vodafone Passport add-on, which charges a connection fee of 75p per call plus the cost of the rate that you would normally pay at home.

Many people who regularly travel abroad or who go away for a long period of time find that buying a local sim card is a much cheaper way of communicating with other people in the country.

For those who want to call the UK, the international roaming sim may be more appealing. It costs up to £30 to buy, and has varying prices for different countries.

Mr Doku offered these tips: "Switch off your voicemail and roaming options unless you really need to use them, and remember international and local SIM cards are a great way to make calls while abroad, as you can benefit from far cheaper rates."

Rates for downloading data

British holidaymakers are being hit by extortionate roaming rates for data usage when using their smartphones, particulalry if they have failed to check the costs of using their phone overseas.

Apparently simple acts such as updating their Facebook status or using Google maps can leave users coming home to bills significantly higher than their normal monthly payment, with over 80 per cent of respondents claiming the costs of their bills had gone up by over £100, according to a study commissioned by the Carphone Warehouse.

The European Commission has proposed that introducing a cap on the cost of downloading data while abroad will not only reduce the amount spent while away, but will also help to persuade network providers to introduce more competitive deals, thereby ultimately making it cheaper.

"Roughly 85 per cent of handsets sold with a post-pay connection at the Carphone Warehouse in 2010-2011 were smartphones," said Matt Stringer, the UK managing director for Carphone Warehouse.

He gives some advice for smartphone users travelling abroad. "Data users should keep a look out for Wi-Fi spots where they can connect to the internet without using the local 3G network."

Currently, smartphone users abroad can easily rack up charges if they're unaware of the international costs, as network providers charge from 85p to £6 per megabyte, depending on where you are. And, while there is normally a limit on the number of megabytes that can be downloaded each month while you're abroad, costs can still amount to more than £40.

Nick Wright, of Billmonitor, said "The current effective per-minute cost for the average customer using roaming data is £2 per megabyte – that translates to £2 for just five minutes of web browsing or £24 per hour of mobile browsing."

He was pleased with the proposed cuts from the European Commission. "As prices reach roughly £6 per hour of normal (non-streaming) mobile internet usage, smartphones will become viable and much more convenient alternatives to using internet cafés or free Wi-Fi areas [the current best alternatives]," he said.

To cut the costs of calling abroad, using Skype in free Wi-Fi spots and internet cafés can often work out much cheaper. Calling from Skype to Skype is free, so users could just end up paying for the use of the internet café, rather than the call.

British holidaymakers spend £750m each year on calling home when they're on holiday, according to research conducted by Tesco Calling Card, and so the news of a charge cap will no doubt come as a relief to many.

Facts and figures

Stay connected – for less

*The European Commission has put a cap on roaming calls within the EU, meaning users pay no more than 35 cents per minute (approximately 30p).

*From July 2012, the Commission will have put a cap on data roaming, meaning costs will be no higher than 81p per megabyte.

*From July 2014, this cost will be lowered again to 40p, less than a quarter of its current cost.

*These EU caps will not affect countries that are not part of the EU, such as Turkey or Switzerland, or countries further afield.

*The cost of calls made outside the EU can range up to £1.65.

*With the cap on data roaming, users will be able to access the internet for just £6 an hour, rather than the current price of £24.

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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