What do AsiaPac’s mobile alliances and secret societies have in common?  Lots, it seems.  Most people have never heard of either and their effect and benefit to the community must be questionable, at best. 

Telco alliances, are the antithesis of their airline counterparts.  Every air traveller knows about Star Alliance, OneWorld, Skyteam, etc. but who’s ever heard of AMI (Asia Mobility Initiative), Bridge or Conexus, let alone what they do or what benefits they may bring to a mobile subscriber traveling around Asia.  One argument constantly garnered in support of regional mobile alliances is easy, affordable roaming, but what is the reality and who benefits?

Roaming is a very desirable feature of GSM networks, particularly amongst regular travellers and corporate subscribers.  It is even more popular amongst operators who benefit from substantially from their roaming customers.  Roaming customers are usually charged at a premium tariff rate on the ‘roamed’ network.  Their call records are processed and either sent to a clearing house for reconciliation with the home carrier (with a subsequent loading of up to 35%) or transacted directly with the home carrier through some sort of pre-arranged inter-carrier agreement.  By the time the subscriber sees the charge on his bill it has been subjected to foreign currency conversions (not always favourable), transaction loadings for the extra processing and priced at premium tariff rates.  Both the roaming and home operators benefit substantially from this type of traffic that is usually far more profitable than domestic traffic that is dramatically affected by competitive forces.  Also, roaming traffic does not carry any overheads needed to acquire the customer such as handset subsidies and discounted tariffs.

It is no wonder that mobile alliances usually target roamers in an attempt to keep them on their partner networks so the revenue can be kept within the alliance.  Of course, if the roaming service becomes seamless for the user or the pricing is simplified or standardised as a result, the roamer will be more likely to stay on the preferred alliance partner’s network.

The success of Vodafone’s Passport roaming plan in Europe is testament to the pricing model where a roamer anywhere in Europe can make a call at his home tariff rate.  In the Asia Pacific market the alliances are more likely to promote seamless service, short code access to all home services and data roaming as the draw cards because parity pricing across such a diverse market has proven very difficult to establish.  For those roamers in low cost markets the benefits are excellent but for those roaming in higher cost markets they may find themselves paying a much higher rate than if they were roaming domestically.  In non-equity alliances it is very difficult ‘balance the books’ or pro-rate across widely diverse ‘local’ tariff bands.

Corporate accounts are constantly looking at ways to manage their staff roaming costs and they will likely be targeted by alliances turning the roaming card.  Consumers are less likely to use roaming after one or two attempts as they recover from ‘bill shock’.  These customers are more likely to buy a prepaid card locally and use that instead.  If the alliance marketing campaign is effective (which invariably it is not) they would more likely to buy a prepaid card from an alliance partner.

As most subscribers are not aware of their service provider’s alliance or its offers, they are likely to miss out on any benefits that may be on offer.  Even if the are aware, it takes hours of investigation to discover those benefits and a degree in programming to work out how to utilise them.  Take Conexus, for example, offering Pay-Per-Day Flat-Rate Data Roaming Mobile Tariffs.  A quick check of their website shows rates for seven countries in seven different currencies.  If anyone can be bothered to convert all to, say, US dollars one will find that the rate varies from US$4 in South Korea to US$20 in Singapore and Japan.   Armed with that relevant information a subscriber only has to work out how to ensure that the handset is manually set to the operator of choice in each country.  Easy, right?

So, if roaming is the main attraction, it begs the question – are mobile alliances of any value and, if so, to whom?  Not sure which alliance your mobile operator belongs to? Probably not a good idea calling customer care to find out – they probably won’t know either!