An open letter to Vodafone on data roaming pricing

Dear Marketing and Pricing Executives at Vodafone,

In the past, I've been pretty complimentary about you guys, especially with regard to things like Passport and innovations around third-party paid mobile broadband.

My attitude has just changed polarity.

In February, I switched my main personal mobile account to an iPhone on Vodafone UK. My main criterion for choosing Voda over iPhones supplied by O2, Orange or Tesco was specifically about international roaming charges. All the other pricing was much the same, and I thought that perhaps Vodafone's network might be less congested than O2's, without a million other iPhone users sharing it.

So I went to my local Carphone Warehouse, asked about the different international fees, checked online - and picked the Reds on the basis of a simple and intelligent charging structure, which seemed to be much less of a rip-off than the others.

We all know that most international data roaming is ludicrously-priced, and that it needed heavy regulation from Brussels to get European tariffs into the vague realm of sanity, with notification-of-charge and so forth. The whole industry privately agrees that data roaming pricing is a joke, even if few people at operators want to be seen killing the golden goose by acknowledging it in public.

But I thought that the costs on Vodafone - basically a flat fee of £5 per day for up to 25MB - were not too unreasonable. It's about half the price of a day of hotel WiFi, or perhaps 2 hours in an Internet cafe. Or 10x the price of Vodafone's UK prepaid daily tariff, which gives 25MB for 50p.

Expensive but acceptable, especially as I'm checking my business email. 25MB is ample for non-heavy use of an iPhone: email, catching up on blogs, a quick bit of Google maps and Facebook. Most importantly, I can be pretty confident that I can just use my phone normally, without double-checking the amount of data usage on the settings menu once an hour.

I know that the current EU-mandated wholesale price cap in Europe is €1 per MB, falling to €0.80 from July. I also know that Vodafone has its own footprint across Europe, so it's not as though it's getting stung for lots of wholesale data fees, as generally you're on-net anyway - so any disparities wash out on inter-country transfer pricing.

So, given that the only reason I'd chosen Vodafone in the first place was because of this tariff - and I'd recommended it to other people as well - I wasn't best-pleased to receive an SMS announcing:

"On June 15 data roaming prices are changing plus some countries will be moved into a different travel zone"

The new prices are £1 per MB, up to £5, then £5 for every 5MB after.

In other words, for 10MB the price has doubled, and for 25MB it has quintupled. For 25MB, that's 50x the cost of the domestic daily price. Apparently you get SMS alerts when close to 5MB and 10MB thresholds.

I see that the press release somehow manages to pitch the change as being positive for customers. I'm impressed that you seem to have managed to hire Alastair Campbell and Peter Mandelson so soon after the general election, to spin bad news for you.

I guess I'm back to using WiFi only on the iPhone when I'm travelling, and I'll go back to taking an unlocked Nokia and buying local data SIMs again.

I've double-checked this with customer service (your IVR system is broken, by the way) and asked to get transferred to someone whose job it is to deal with what I described as "high nuisance value" customers like me. Double-checked with her too, that this applies across the board, including iPhone tariffs.

So. My main (only!) reason for choosing Vodafone against its competitors has just been removed at a month's notice. Three months into an 18-month contract, so I can't just churn immediately as I'd like.

Honestly guys - I've heard Vodafone talk at various events and conference about customer loyalty, stickiness and so forth. Have you not worked out that if you show *contempt* for your own customers, that might work against you? You even got a plaudit the other day for smartphone customer loyalty - and up until 3pm this afternoon I would have given the survey a thumbs-up as well. Let's see what the next one looks like, eh?

[Edit: Note to all mobile operators: as long as you pull stunts like this, do you *really* think you can convince your customers to sign up for mobile payments/wallet service, or managed identity & authentication, or similar? How do I know you're not going to change the rules mid-contract to permit spam or charge extra? This whole idea of massive price changes to live contracts illustrates a huge amount of bad faith and a lack of business professionalism]

It's not as though you're increasing per-GB price for mass mobile broadband downloads either, where perhaps there's an argument that costs and prices are out of kilter. This is a per-MB roaming price - quite probably the single most overpriced, unjustifiable and most-hated item on operators' tariffs in the entire industry.

Now it's vaguely possible that this cost somehow reflects increased signalling through VLRs and RNCs, rather than actual data downloads, because of regular international data connection setups from smartphones. But if that's the case, you should say so - and frankly I can't believe anyone uses $20 worth of VLR resources per day. It would be cheaper for you to give users a local Vodafone SIM to switch to.

Overall, it's fair to say I'm furious about this. Oh, and I wasn't going to mention this before today - but your network in central London sucks too - the number of times I've been with friends with O2 iPhones who have coverage when I don't is amazing. As are the number of dropped data connections, mysterious "403" errors that need me to switch off & re-register and any number of other glitches.

I've written before about "Resentment Base Pricing" and "Active Customer Disloyalty". Looks like I've got a good case study.

So Vodafone people: any excuses? Is it genuine customer contempt, or just accidental?

Responses welcome either on this blog or via email.

Dean

(Note 1: journalists - feel free to quote me)
(Note 2: Google, you should probably work out a way to get the Maps app to send a GPS look-up via SMS when the user has data roaming switched off, returning with the nearest free WiFi cafe and a voucher for a discount espresso)

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