Roaming charges make consumers pay through the nose

Carriers hold on to costlier per-minute billing

By Kim Da-ye

Staff reporter

Making a telephone call home from abroad has never been an easy experience for Lee Sang-a.

The 26-year-old researcher, who travels abroad twice a year, carefully checks international roaming rates before each of her trips to avoid hefty bills, but that isn't enough to gain her peace of mind when making and receiving calls overseas.

"As I talk, I keep checking how many seconds have passed. If a minute and two seconds have passed, I'll continue talking on the phone though I have nothing to say. I'll hang up after the 50th second. That way, I have not wasted the minute," said Lee.

Too much hassle for a holidaymaker, she says, thanks to the "per-minute billing" policies on roaming employed by Korean telecommunications companies.

Lee's frustration could be shared by many of the 9.5 million South Koreans who have traveled abroad so far in 2010. Last year's data from the Korea Consumer Agency show that the country's largest mobile-phone carrier, SK Telecom, charges the second-highest roaming rates among the leading carriers of eight Organization for Economic Cooperation and Development (OECD) countries, which have telecommunications environments comparable with Korea, plus Hong Kong and Singapore.

SK Telecom charges 2,200 per minute for calls made from the United States to Korea, and receiving a call could cost about 1,214 won per minute. Adding salt to the wound, consumers are billed by the minute, which means a minute and a second on the phone will be counted as two minutes.

The controversy over the billing systems of wireless carriers is nothing new. After charging local calls on a per-10-second basis for more than a decade, SK Telecom finally succumbed to pressure in March and switched to per-second billing. KT and LG Telecom, the country's the two wireless carriers, have reluctantly agreed to follow suit by the end of the year.

However, none of the carriers are planning to adopt per-second billing for international calls. An SK Telecom official said that the per-minute billing for roaming would be difficult to change as it's based on agreements with foreign wireless carriers.

``We work under agreements with foreign carriers. We are a kind of a middleman that connects calls, and roaming is, in most parts, operated by our foreign counterparts. We bill our customers on behalf of them, so we follow their price plans,'' said the SK Telecom official.

A KT spokeswoman agreed, saying that per-minute billing is common among foreign carriers.

``There are some carriers having different billing systems, but we have noticed that consumers prefer consistency in pricing. That's why we universally charge by the minute,'' she said.

Roaming, as described by the telecommunications companies, is a complicated process that involves multiple parties. Upon entering a foreign country, the mobile phone of the user picks up the signals of one of the local carriers that have roaming agreements with the carrier at home. The local network seeks authentication from the home operator, and when the latter approves, the phone starts working.

When a voice call is made, the visited network receives it and transfers it via international transit to the receiver's home operator. Receiving calls involves callers' carriers routing the call to the receiver's home operator which then transfers it to the host operator abroad. In Korea, multiple international call operators help transferring the call, and with their rates varying, consumers can choose an operator in advance. The record of the calls are kept by the visited network and later sent to the home operator which bills its customers.

This type of roaming became popular recently because of the wide distribution of phones compatible with GSM technology. Korea has embraced the CDMA standard, but most of the rest of the world relies on GSM and SIM cards. Travelers used to rely on ``roaming phones'' which they book in advance and pick up from the airports. Users of roaming phones are usually charged a rental fee per day plus calling costs that tend to be cheaper than ``automatic roaming'' rates.

LG Telecom reported in April that the number of roaming users is nearly eight times as many as the figure from a year earlier, thanks to the addition of roaming-compatible mobile phones.

Despite such an increase, domestic mobile phone operators say that per-second-billing is unlikely to be adopted because of the agreements with foreign operators, but the precedent in Europe shows it isn't impossible. The EU put an end to the "roaming rip-off" last year, according to the European Commission, limiting roaming rates for voice calls, text messages and data transfers.

The new EU roaming rules enacted in July 1, 2009 limits the price for sending a text message to 11 eurocents (160 won). Calls made or received while abroad were capped at 43 cents and 19 cents per minute respectively. Before the rules brought in by the European Commission, the European Parliament and 27 member states, a roaming call could cost as much as 1.70 euros per minute for a German visiting Austria and 2.50 euros for a Belgian calling home from Cyprus.

Importantly, the 2009 rules require ``per-second billing after 30 seconds for roaming calls made and from the first second for calls received abroad.'' The commission's press release said that until July 2009, consumers had paid "up to 24 percent more than the time actually used making or receiving calls."

An official from the Korea Communications Commission (KCC) said the ``Eurotariff'' was a highly unusual case. He said that more than 70 percent of the domestic carriers' income from roaming goes to foreign operators. Unless they agree to per-second billing, the home operators wouldn't be able to afford charging customers by the second.

But the OECD which Korea belongs to has considered adopting a pricing system similar to the Eurotariff among its members, although implementing it would be a great challenge. The KCC official said, ``The EU works like one economic unit and has existed for a long time. But the OECD does not have an executive body capable of forcing mobile phone operators to comply with regulations.''