Why Is The Roaming Free?

[Przemolog]

Originally Posted by snaimon

The more I think about it, the more I think that most costs are simply FIXED.
(...)
The trick is to drive up capacity usage; the more usage, the more revenue opportunities the company has.

Stan, I'm completely not involved professionally in the mobile business but I think that your thoughts about operators costs may be correct.

Originally Posted by snaimon

I think one really has to wonder about COSTS. For instance, some German carriers are offering 5 and 6 cents / minute INNER-NET prepaid calls. Don't know about postpaid, but it would not surprise me if there are offers with very low network internal calling. And you don't think they are still making a profit on those calls? If all calls were made within the network, would that cell company not make a profit?

I'm also almost sure that mobile companies would make profit only on inner-network calls for 5 cents/min.

Originally Posted by snaimon

And even when the called party is roaming!

In theory, it might be so. But roaming always involves using the mobile infrastructure on two carriers instead of one. Why should the carrier pass some of its revenue to its roaming partner in order to provide free incoming calls, if it can keep it all and
charge extra the customer for incoming calls?

Originally Posted by snaimon

Is the roamer REALLY a burden or additional cost on either network? I don't think so at least if you accept my line of thinking above that most costs are fixed.

Neither burden nor additional cost. However, it uses the stranger network and must pay for it.

Originally Posted by snaimon

In CPP countires, the price to receive the call is built in to the caller pricing for NATIONAL calls. Who gets the revenue when the national user roams? Is it split between the two parties (say Germany and France, when a German visits France and roams and receives a call from his home country)? Must be. Just another revenue raising opportunity!

The German caller is paying his regular rate, perhaps as low a 5 cents per minute inner network. The caller cannot be expected to know if the called party is roaming or at home. In terms of fairness, ideally, the caller should pay an international rate to call his buddy roaming in France, but he does not.

What is your point? Do you think that the German carrier should pass over the Rhine some share of the 5 cents it gets from the calling party to its French partner? And it's because of the fact that a German customer roams in France doesn't affect the costs of either of the two operators? And moreover, one could even say that the German operator gets a chance to make some extra profits because the called party doesn't occupy its radio channels, but French ones

Originally Posted by snaimon

Another idea I have is that, since the free roamers are relatively small (Liechtenstein, Estonia, Iceland, IOM) with small indigenous populations, the big guys did not fear large revenue losses and granted "most favored roaming nation" status.

Do you think that such kind of "roaming status" really exists? :unsure:

Originally Posted by snaimon

Of course, the big guys never dreamed that the SIMs would be sold internationally. If the concept of free roamings takes off and puts a real dent into the big guys' roaming revenues, I would bet any money those most favored free-roamer nations will lose their FREE INBOUNDs in a heartbeat.

I believe that big guys are not really afraid of losing revenues because of international "free roaming" SIMs because they are aware of their disadvantages.
High initial cost, new foreign number, "strange" making calls, handset compatibility issues, lack of support in the customer's language - all this makes those products not so attractive as they might look at first sight.
I think that international SIMs are something like calling cards. Why do calling cards exist at all? Dialing an access number, PIN and destination number is always more complicated and takes more time than dialling just the destination number. PINless solution don't make it much shorter. My supposition is that big guys charge a lot for "just dial the number" convenience. "Usage complications" related with using international SIMs, calling cards (and callback services like CBW and any other workarounds for high rates....) IMHO make the products under consideration pretty uncompetitive

Originally Posted by snaimon

Somehow, someway, the outbound calls from Liechtenstein, Estonia, Iceland, IOM and the international interconnect fees to Liechtenstein, Estonia, Iceland, IOM from the nation networks are paying for free inbounds.

In case of Manx SIMs, "almost international" interconnect fees between UK and IoM may be real importance. I have a strong impression that many Manx SIMs are strongly positioned for UK users