Canadian Mobile Company Cuts High Roaming Fees

A new mobile service provider is looking to change the way Canadians stay connected when they cross the U.S. border and deflate Canada’s notoriously high roaming charges in the process.

Vancouver-based Roam Mobility has teamed up with American company T-Mobile USA to offer Canadian travellers local roaming rates—up to 99 percent less than major telecoms—for talk, text, and data when they travel to the U.S.

Roam’s CEO Emir Aboulhosn says Canada’s reputation for having some of the highest mobile fees in the world needs to change.

“Our attitude towards this whole thing is that we see staying connected as a right,” he says.

“Canadians are addicted to being connected to the Internet, so it’s a lifestyle thing. When you go across the border, your habits shouldn’t have to change because it’s expensive. [Roam Mobility offers] the same price or cheaper than you use at home.”

The company will provide fixed rates and pre-paid plans for unlimited voice and text starting at $15 for three days, and up to $60 for a month. Data packages ranging from 500 MB to 5G are also available for a fixed price, starting at 2 cents per megabyte.

The services are designed for unlocked GSM cellphones and work by inserting a U.S. SIM card provided by Roam.

While this can be a barrier for those whose contracts restrict them from using other network’s SIM cards, alternatives such as purchasing a $30 SIM-equipped “breeze phone” or a wireless hotspot device are available.

The services are scheduled to launch on Jan. 16. Aboulhosn says so far the response has been “unbelievable” and employers are excited about keeping their staff connected for a lower cost when they travel.

Aboulhosn says his services are designed to be used in conjunction with major telecoms rather than in direct competition. But he hopes that offering affordable alternatives will alter the landscape of telecom monopoly in Canada and move toward a culture that empowers consumers.

European consumers, for example, have more carriers to choose from, and a competitive market means unlocked, contract-free mobile services are widespread.

Canada’s Exorbitant Roaming Fees

In May 2011, the OECD released a report showing Canada has the highest roaming fees in the world, at an average of US$24.61 to use one megabyte of data in a single day, compared to the 34-country average of US $9.48.

One megabyte is approximately the amount of data needed to send 10 photos, the report said.

In addition, a 2010 Bank of America Merrill Lynch global telecom report showed that of 50 countries surveyed, Canadians pay the highest mobile phone bills, and lead the world in lengthy, binding contracts (three years on average).

For anyone who has ever suffered “bill shock” after returning from a trip to find unexpected roaming charges on their phone bill, increased consumer control could be welcome news.

In recent years, in response to increasing complaints of bill shock in Europe, EU regulators have enforced caps on roaming charges, and introduced rate-transparency requirements for carriers.

Last year, U.K. communications regulator Ofcom also announced plans to slash mobile roaming fees by as much as 80 percent over three years for EU citizens visiting another member state. The move was heralded as an example of regulatory willingness to preserve consumer interest.

Aboulhosn insists Roam Mobility is a “socially-responsible” idea in an industry that can inspire consumer frustration at times.

“We have found a way to offer transparent pricing in an industry that’s not always easy for consumers to understand,” he says.

Canadian media democracy groups such as OpenMedia.ca have argued that Canada’s dependence on the Big Three telecom oligopoly—Rogers, Bell, and Telus—makes consumers vulnerable to exploitation and price gouging and needs more competition from independent providers.

They say expensive communications systems ultimately harm the economy because innovation and technology are stifled, causing Canada to lag behind other countries.