Scant competition draws complaints, but a new CEO talks peace
There’s a couple of ways to get travelers’ attention fast: One, pick their pockets in a public place. Two, have their mobile phone service provider charge extravagantly for roaming fees.
In wireless telecommunications talk, “roaming” means operating a cellphone beyond the geographic reach of its home service provider, the company that bills you for local mobile service. It also means additional, often obscure charges beyond what you’re accustomed to when you’re on island.
In Cayman, the local carriers include LIME Cayman and Digicel, companies that provide local service only here on Grand Cayman, Cayman Brac, Little Cayman and the waters within a couple of miles beyond shore. Try your phone outside these tight confines, say in Jamaica, Central America, Florida or the United Kingdom, and you find yourself roaming. The way local phone contracts work, you also could be paying through the nose.
Since there is little competition here – only a pair of providers – roaming fees are higher than what Americans and Canadians pay. A pair of local examples show how expensive it can be to roam with smartphone at the ready.
A Cayman businessman reported traveling to Central America on holiday and using his Cayman-based cellphone “moderately,” he said over a few days’ visit. His roaming bill: $2,500. He was furious over the unanticipated expense and dropped his service. It’s been months, and he still hasn’t paid his bill, risking an assault on his credit.
In an even more dramatic case, a Grand Cayman resident and local civil servant who said she had been a LIME customer for years, took a trip to Miami to buy a piece of property.
Working in a foreign land and with the assurance, she said, that “I had unlimited roaming with my contract,” she used her Blackberry to make calls, text and transfer financial and other data during her visit.
When she got home and opened her mail, the monthly LIME bill shocked her cold. She owed, the invoice claimed, more than $7,000 for phone service in the States. The $7,000 was for roaming fees.
“I was charged extra every time I checked my voice mail, made a regular call, messaged someone,” she said, outraged. “I called and told them no one had ever told me of any policy changes. The customer service people were polite, but I could not get any response from the supervisor. He never, ever returned my calls.”
It was 2013, and this frightened government employee, who still wishes to keep her name out of the public eye, had no idea where to turn in response to fees she thought were completely too high, utterly unexpected and, she said, a violation of trust between her and her long-time mobile phone service provider.
“I was devastated,” she said.
So, how does this mysterious world of roaming work? What is it about cellphone service that generates these weird charges on some customers’ bills?
Here’s the deal: Roaming isn’t so much what the customer does driving around the north of England or walking on a Jamaican beach. It describes the computer operations that keep cellphones – and other wireless devices such as iPads – connected to whatever telecommunications networks are available at a particular time and place. It’s a system that keeps calls from disappearing into the ether as distance from a cell tower or weather conditions change.
What’s more, the next cell tower may be on the network of a completely different company than the one you just departed and is now out of transmission range. In fact, the cell tower transmission range you just entered may use different processing standards than the one you just left. Computers running the networks do the job of translating all the electronic signals coming into a local network, then shooting them back out – in the right direction.
The roughly 1,000 companies that operate these wireless systems earn their revenue through contracts with their phone customers as well as contracts with just about all other such companies in the world those customers may confront when they travel, telecom experts explain. And each wants to maximize net revenue.
“It’s all embedded in their pricing strategy,” according to Stanley Conrad, a Texas-based phone engineer who has worked in telecom for 35 years. “You can get a contract with low monthly rates for local service if that suits you,” he said. “But then, you go to Mexico for a week, and they hit you with high roaming fees. If you travel out of the country a lot, you have to have a contract that maybe costs you a little more on a monthly basis but minimizes the extra fees when you’re out of network.”
And indeed, virtually all mobile service carriers offer many levels and categories of service. The Cayman woman hit with $7,000 in roaming fees, Conrad figured, “probably had a contract with lower monthly rates but jacked-up out-of-network charges. But if that’s true, she didn’t know it.
“The contracts aren’t the easiest things to understand,” he said with a laugh.
Indeed they are not. Try reading your cellphone contract’s small type. Like many legal documents accompanying consumer goods and services, they can be difficult to comprehend, to say the least.
Melanie Pinola, a writer and blogger on the mobile industry and other technology since 2010, said roaming fees “are outrageous and not clearly communicated when customers sign up. Even being on a cruise ship and using your cellphone just off the coast of your own country can rack up these fees.”
In recent years, the European Union studied the pricing structures of carriers operating in the 28 EU member states with an eye toward developing a standard across national boundaries. In July, a commission instituted its plan, dropping the cost of cross-network calls dramatically and saving consumers perhaps billions over years.
So firmly established were the high roaming fees in Europe that the new rules reduce the cost of making a call by 21 percent, of receiving a call by 28.5 percent. Sending a text message costs 25 percent less than it did there before July, and downloading data and browsing on smartphones declined in costs by more than half – 55.5 percent.
Neelie Kroes, vice president of the European Commission, emphasized in public messages that such regulation of the continent’s wireless pricing structure was “vital for the consumer” and still ensured the incentives that would keep investors interested in Europe’s continued involvement in telecom innovation. Consumers worldwide applauded the changes.
The Journal sought insights from the CEOs of Cayman’s two wireless service providers, hoping they would explain from the companies’ perspectives, why some once-loyal customers could become so negative about their cellphone service. Chris Hayman, chief at Digicel Cayman, did not respond to requests for comment.
Bill McCabe, who became CEO of LIME in late 2013, called in with apparent concern over alienated customers.
How could people incur such high roaming bills so unexpectedly? McCabe said he didn’t know. He only arrived at the top job last fall. But he seemed genuinely troubled at the very notion and empathized with the customers. “It would frighten me to death to face a $7,000 bill like that,” he said.
He also said his principal efforts as CEO have aimed at lowering roaming fees at the main destinations where Caymanians go for business and holiday – the U.S., Jamaica, Canada and other locations in the Caribbean, in that order. “We’ve brought all of those fees down so the cost of making and receiving calls there is the same as it is in Cayman.”
In fact, he has overseen the launch of several new pricing systems for LIME customers who travel a fair amount, as well as programs that remind customers abroad by email how they can get lower phone and data rates. Another email reminder goes out to customers whose bill suddenly seem higher than normal. “We don’t want them to be wasting money, so we tell them it looks like they’re doing something different this month,” the executive said.
McCabe, who served as a mobile-industry executive in Britain and New Zealand before taking the Cayman position, had an early role in the European Union’s recent slash in roaming fees, and he said he was grateful when the commission finally laid out the rules last summer. “It has been a long struggle.”
His bottom line about outrageous roaming fees for LIME customers: “I want that never to happen again. If it does, I want to know about it immediately. We want customer loyalty, and we want them to be able and willing to use their phones whenever and wherever they are.”
As for the Cayman civil servant who got the $7,000 roaming bill before McCabe came along, she said she had trouble getting the company to take her pleas of unfairness seriously. Finally, she took her complaint to the government and talked with officials. She would not say exactly which ones. “But then I got a very prompt response.”
The company, she said, agreed to waive $6,000 of her remaining bill. “I had already been paying a little on it,” and she dispatched the remaining $1,000 in $100 a month installments and has paid off her remaining bill.