Spark, Vodafone and 2degrees gained a collective $114m in high-margin revenue from roaming in 2019 - the last full reporting period before the pandemic - according to Commerce Commission figures. Photo / 123rf
Spark, Vodafone and 2degrees gained a collective $114m in high-margin revenue from roaming in 2019 - the last full reporting period before the pandemic - according to Commerce Commission figures. Photo / 123rf
One of the telcos' biggest pandemic pain points is starting to ease as some semblance of pre-Covid travel returns.
Border closures blew a $114 million hole in Spark, Vodafone and 2degrees'collective annual revenue as high profit-margin roaming revenue all but dried up.
Now, 2degrees has seen a noticeable bump in outbound roaming for Kiwis using mobiles when travelling overseas, even if it's still somewhat off the pre-outbreak pace.
"Pre-pandemic we would see tens of thousands of people roaming in a month," 2degrees chief technology officer Martin Sharrock said.
"This dropped to almost zero during 2020 and 2021, but has been steadily increasing this year, and is now sitting at just 20 per cent of the pre-Covid peak."
Inbound roaming – mostly returning Kiwis and Australian travellers – is also up. Sharrock said it was now at 40 per cent of January 2020 levels.
Spark would not detail roaming numbers until its full-year result next month, but a spokeswoman said: "We are pleased with the return of roaming over the last few months as borders re-open, and are optimistic that we will see a further increase over school holidays.
In February 2021, when Spark reported its first six-month period with border restrictions fully in place, the telco said it lost around $26m in high-margin mobile roaming revenue due to ongoing travel restrictions and border closures.
And on an analyst conference call following the telco's first-half 2022 result, chief executive Jolie Hodson said it would likely be 2023 before the segment recovered - though she qualified it might not return to its previous level.
At its full-year result in May, Vodafone's 50 per cent owner Infratil said: "As the easing global pandemic allows for more international travel, the business should also see a rebound in roaming revenues".
There were no numbers or even ball-park time frames.
The Vodafone section of Infratil's annual report offered the broad brush: "We are looking forward to welcoming back more roaming, seasonal worker and tourist revenues over time."
A Vodafone NZ spokesman declined to give any percentage pickup numbers, citing commercial sensitivity, but noted the telco has recently extended roaming to the Cook Islands.
Roaming used to be something of a high-margin revenue bonanza for the mobile telcos.
Telecommunications analyst Peter Wise pointed to a Commerce Commission survey of retail telcos for the 2019 financial year, the last full reporting period before Covid.
It found Spark, Vodafone and 2degrees had roaming revenue of $114 million - $90.7m from Kiwis roaming offshore, the balance from travellers to NZ.
But there may never be a return to the salad days - or at least not to the same level - as Spark's Hodson has warned.
Travel software maker Serko has reported a new normal of shorter business trips involving smaller parties, and travellers are getting more acclimatised to new technologies like wi-fi calling, although even that can add into a roaming data allowance if you slip beyond free wi-fi.
Tuanz boss Criag Young says trans-Tasman roaming charges should be scrapped. Photo / File
How about zero roaming charges?
If one consumer group had its druthers, there would be no roaming charges whatsoever - at least for trans-Tasman travellers.
As borders began to reopen in March, the Technology Users Association of NZ (Tuanz) called on telcos on both sides of the Tasman to scrap roaming charges.
It said such a move "would be in the spirit of the announcements as far back as 2013 by the Prime Ministers of both countries to empower regulators to ensure roaming prices were regulated."
Vodafone: Nothing going on but the rent
"Travellers don't expect to get free rent overseas just because they pay for a house back home, and likewise international roaming charges cover the rent for using another company's mobile network," Vodafone NZ corporate affairs lead Nicky Preston said.
"Roaming charges are based on us recouping costs, and we believe $7 a day to use your mobile like you're at home is a reasonable price for travellers," she added.
If Vodafone customers did not want to incur international roaming charges they could instead use the telco's Wifi Calling service for free, and make and receive calls or texts using a wi-fi signal, Preston said.
2degrees: Free Aussie roaming for business customers
A 2degrees spokeswoman said: "2degrees offers free Aussie roaming for business customers on all 2degrees Business plans, and has for a few years now. Business customers can use their NZ plan's data, minutes and texts like they do at home, helping them keep business as usual while travelling in Australia."
Spark: Real costs
A Spark spokeswoman said: "It is important to note that while travel between Australia and Aotearoa has significantly reduced over the last two years, roaming charges have remained in place for those who have still been travelling – so it's not accurate to suggest we are 're-starting' roaming charges."
Roaming costs for customers had significantly reduced over time, she added.
But Spark incurred costs that needed to be recovered when connecting international calls, delivering text messages and transporting data use, not only between telco providers but with third parties that carried and managed connections, she said.
Customers had the option of buying a local sim card, or using apps via wi-fi, she said.
That is true - but buying a local sim card involves the inconvenience of a different phone number, and hotel and cafe "free" wi-fi often has limits, leading travellers to eat into their roaming data allowance.
Clark: Operational matter
A spokesman for Communications Minister David Clark said it was an operational matter for telcos. Clark did not offer immediate comment.
