Subject: [NEXTEL-1] Kerton Wireless Review #38

From: Marcel <[email-masked]>
Date: Tue, 25 Mar 2003 17:41:30 -0500

The KWR is written by Derek Kerton and The Kerton Group.  It is circulated through our
affiliation with the online weblog, Techdirt.com.  We review wireless topics of interest,
usually taking a stand and always calling it like we see it.  At some point, you or
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well as forward this e-mail to anyone.

__________________________________________
Wireless Voice Roaming
The Shake-down Of World Travelers
Date 2/2/2003

Of all US workers considered “mobile”, only 15% regularly leave their home region during
the course of business.   But for that 15%, getting reliable cellular phone service on the
road becomes as challenging a proposition as making an O’Hare connection during a mid-West
snowstorm.  Many carriers in the marketplace tout their global roaming coverage, but when
the plane touches down and you power up your phone don't be surprised to see “no service”
on your screen.

Recently, I returned from a trip to Africa and Europe that left me thinking about the sad
state of global roaming.  It seems there are a lot of problems a cellular customer can
encounter when trying to use their phone in foreign lands, some technical, and others
cost-based.  After traveling to four continents in the past two months with two phones, I
have found that travel indeed can be perilous, but the worst muggings may not lurk around
street corners but are in fact on the other side of the “Send” key.

Firstly, some definitions.  National Roaming occurs when you are in your carrier’s
operating country, but you have entered an area where your carrier does not provide
coverage so you have been automatically switched over to another carrier’s towers and
network.  International roaming is what happens when you leave your carrier’s country, and
connect to another carrier’s network in the foreign destination.  In both cases, the
company providing you with coverage is not the company that provides you with a bill.
Since operating a cellular network is not charitable act, the roaming carrier will only
provide you with phone connections if they are able to pass the call charges back to your
carrier for billing.  These inter-billing relationships are called Roaming Agreements and
they are struck between carriers to define the billing rates of roamer calls.  Here’s the
first problem customers will have:  You can only use your phone in places where a local
carrier has signed a Roaming Agreement with your home carrier.  Often, your destination
will not fall into this category.  Larger carriers are doing a steady job of adding
Roaming Agreements, and they proudly list roaming partners on their brochures and
websites.

I’ll fall quickly into problem number two, here:  The Roaming Agreements that are struck
are awful!  It seems to be an industry convent to extort money from customers as soon as
they leave their own network.  Just as an example, Cingular (USA) customers in France pay
$2.49 per minute for outbound local calls to France, and a whopping $3.99 per minute for
incoming calls.  Cingular explains the high incoming rate as including the $2.49 for
airtime and an additional $1.50 for long-distance charges in re-sending the call from the
US-dialed number to France.  Other carriers have similar pricing.  The reason for this
gouging is that cell phone customers and purchasing managers choose a cellular service
provider based on domestic rates, and almost never consider the roaming rates, so carriers
have little reason to lower these prices.  People often cringe after receiving a
low-priority call when roaming overseas, since even annoyance calls can cost you $8 in a
blink.

Of course, roaming agreements and prices matter little to the traveler who powers up the
phone to find no service at all at their destination.  This situation happens because of a
lack of a roaming agreement between destination and home carriers, or different
frequencies of operation, or different technologies for encoding the calls.  A CDMA phone
(most Verizon or Sprint customers use these) will roam only to a few countries (Canada,
South Korea, Brazil…) because CDMA is less established globally.  What’s more CDMA
operators normally use one of three different frequencies (800MHz, 1800MHz, 1900MHz), so a
Sprint PCS phone is unlikely to work on a TeleSP network in Brazil, for example.

GSM customers find themselves in a somewhat better position.  Your phone is GSM if you
have a “SIM’ card in it.  The SIM is a smart chip that contains your carrier’s network
configuration and your subscriber identity on it.  Global GSM deployment is much more
widespread than CDMA, and thus better for world travelers.  Once again, there are
different frequencies used in different countries (see
http://www.gsmworld.com/index.shtml).  US and Canadian customers are almost always on the
GSM 1900MHz band.  That’s unfortunate, since almost every other place in the world is
not.  Most countries operate GSM on 900 and 1800MHz frequencies, making the US and
Canadian travelers resort to payphones or smoke signals.  Relief comes in the form of
multi-band phones (or “world phones”), which I highly recommend selecting at the time of
purchase.  World phones are usually capable of both the widely used 900MHz and North
American 1900MHz.

GSM customers also have a truly cost-saving option when they travel.  Assuming their phone
operates on a frequency that is available in the destination country, they can purchase a
SIM card from a local carrier, and swap it with the one in their phone.  These cards can
often be bought in the destination airport or convenience store, but can also be bought
(at a premium) before departure from companies like www.telestial.com. With a SIM card
from a local provider, you operate like any other customer of that carrier.  Your home
carrier is completely out of the relationship.  If bought in the destination country, a
SIM card including a local number usually cost about US$30, and include 15 minutes or so
of prepaid usage.  Additional minutes of use can be added in a multitude of ways, the most
popular of which is to buy a prepaid card at a local tobacconist or convenience store.
The card includes a scratch-off pad hiding a numeric code that can easily be entered into
your phone to add the minutes to your account.  Cost per minute varies widely depending on
carrier and country, but in economically developed regions expect around 50 cents per
minute for outbound calls, and nil for inbound! (most countries use a calling-party-pays
model for cellular).  In this prepaid relationship, there is no contract, no billing
address, and no information to give to the carrier.

There is however, one problem with this SIM card swap:  your friendly home provider may
have “locked” the phone to their SIM card.  SIM card locking is a way carriers assure that
phones they subsidized get used only on their networks.  It’s dirty pool in my books,
since they already make the customer sign a contract for a year or more with a penalty for
leaving  ostensibly to compensate them for their subsidy to the phone.  Carriers always
lead the customer to believe that the phone will belong to the customer either after the
term of the contract, or after paying the early-termination penalty.  The phone they have
“sold” you, however, is only capable of connecting to their network!  To find out if your
GSM phone has the SIM card locked, either call your carrier and ask, or find a friend with
a different GSM carrier, and try swapping cards.  It only takes a minute to get results:
either the phone will work, or it will show an error message.

SOLUTIONS:
So what are the best solutions for roamers?  Try some of the following:

          - Go Incognito  Hey, you’re on holidays, forget the cell phone and relax.  Yeah,
          this doesn't work for me, either.

          - Domestic Roamers  If you stick to your home country, but move around within it
          a lot, choose a carrier with national network coverage and a nationwide plan.
          Be aware when you are roaming (analog in particular), and try to reduce call
          volume at these times.

          - Global Roamers  Choose your carrier with a preference for GSM, but be sure to
          get a “world” phone or you will get none of the roaming benefits of GSM.  Be
          auspicious in your use of global roaming services since charges can escalate
          rapidly, and you are contractually liable for them to your home carrier.

          - Road Warriors  Buy or borrow a SIM-unlocked GSM world phone for use whenever
          you go abroad and need to stay in touch.  Do this as either your primary phone,
          or as a separate handset just for travel.  Use a prepaid account in the
          destination country.  Sharing the new foreign number with an admin helps route
          high priority calls to you.

          - My Solution  I prefer the call characteristics, and higher data rates of the
          CDMA 1X networks in the US, so I’m a Sprint PCS customer while at home.  When in
          Canada, I simply take a beating on CDMA digital roaming (~80 cents/min).  For
          global roaming, I picked up an Ericsson R380 Worldphone (US$95 on eBay) that
          operates on GSM 900 and 1900.  I have popped SIM cards from a half dozen
          carriers into the Ericsson to keep costs down while abroad.  While using the
          Ericsson, I try to arrange the majority of my calls as inbound, which is usually
          free.

By now it should be clear that global roaming is as complex as the bill your cellular
provider sends you every month, and then some.  This discussion only reflects voice
services, since data roaming is even more problematic.  Furthermore, not all special
services, such as voice mail, messaging, or other premium services can be guaranteed while
roaming.  But despite the challenges, as individuals and as business people we have a
driving need to communicate.  That being the case, there are ways to reduce the costs,
disconnections, and inconveniences of cellular communications while traveling, some of
which are briefly mentioned above.  There are many more methods that can be used to
further provide savings, but they are less convenient, and thus apply to cases where
savings are more important than simplicity.  If you or your firm are active roaming
cellular customers, and would like a more in-depth or customized solution for reducing
communications charges, please contact the author.

********************************************************
Thanks for reading.  I'll be sending more Kerton Wireless Reviews soon.

best,
Derek Kerton,

*Mr. Kerton is a Principal Consultant at The Kerton Group, based in San Jose, CA.  For
more info, visit http://www.kerton.com

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