How to reduce international roaming costs

For companies with employees traveling internationally, the ability to stay connected with mobile devices is imperative. Unfortunately, this generally means astronomical roaming fees. While domestic wireless calls in an optimized pooled plan can be as little as 5 cents per minute and "unlimited" data plans provide data connectivity at a fixed cost of $40 to $50 per month, international roaming usage charges for U.S. customers are typically around $1.50 per minute, 50 cents per SMS, and $5 to $10 per MB of data.

At these rates, it is easy for enterprise users to incur charges of $1,000 or more on a week-long business trip. The high cost of roaming services arises from international transport charges incurred by the home network provider (all calls, even incoming calls originating from the foreign country being visited, are routed via the home provider's network), the wholesale charges levied by the foreign network to the home wireless provider to originate/terminate the call on its network, and the significant pricing markups applied by all carriers involved.

However, enterprises can dramatically reduce international roaming costs by enforcing demand management, strategically selecting providers and plans and deploying technology solutions.

Demand management: Put a policy in place

The quickest way to reduce international roaming expenditures is through user education and behavior modification. Guidelines should be formalized in a wireless policy document and the enterprise should implement a wireless usage/invoice review process or use a solution to identify users who are not adhering to the policy. These guidelines may include:

* Reduce call length whenever feasible.

* Use landlines and/or calling cards for inbound and outbound calls when possible and cost-effective (e.g., don't use outbound calling at hotels). Note that international toll-free numbers targeted to internal users can further encourage this practice

* Physically turn the cell phone off whenever the user is not available to take calls. This decreases the likelihood of incurring dual international charges from the two-leg communication of the international call to the handset on the foreign network, and the forwarding of the call from the handset back to the domestic voice mail server.

* Avoid unnecessarily downloading attachments via cellular data in favor of waiting until a LAN or Wi-Fi connection is available.

* Disable automatic updates, background synchronizations or other applications that may automatically connect and utilize the foreign cellular network.

Obviously, employees should use these techniques only to the extent they do not impact business activities. But even with that proviso and without any form of enforcement activity, a typical enterprise can reduce its total wireless roaming charges by 20% simply through heightened employee awareness of the issue.

Select the right provider and international plan features

Some U.S. cellular providers have plan options that can reduce roaming usage charges for a fixed monthly fee that is less than the roaming charges that are avoided. Options may include reduced voice rates, international data bundles and reduced messaging fees.

Some of these features can be activated and deactivated on an as-needed basis, enabling the enterprise to pay the monthly fees only for the duration of the international business trip, whereas others have minimum terms that require a company to evaluate whether the option cost during the feature's term will offset the user's expected international usage costs.

A recent analysis conducted for a midsize pharmaceutical company showed a savings opportunity of more than $70,000 per year by simply placing its 300 international travelers on the appropriate voice plan. Implementing this change required only a phone call to the incumbent wireless provider.

Also, there are differences in country-by-country roaming rates between domestic carriers, and some cost savings can be achieved by selecting a provider on that basis. However, no U.S. providers have significantly lower roaming rates or are members of roaming consortia (e.g., Conexus Mobile Alliance in Asia) so variance tends to be limited.

As a result, roaming rate differences between providers generally has negligible impact on the cellular total cost of ownership, compared with domestic plan pricing, free mobile-to-mobile minutes, or device pricing, and is therefore rarely the primary determinant in a vendor selection process.

Large enterprises have also occasionally been able to negotiate with their favored provider to obtain specific roaming rates for countries with particularly high roaming usage. This option is available for only the very largest wireless deals, and the negotiated incremental discounts, when available, remain small.

Consider utilizing a local SIM card/phone

The common alternative to paying high international roaming rates has been to obtain service directly from a local provider in the foreign country. The user could rent a phone from an airport kiosk or enter a prepay agreement with a local cellular provider, and either replace the existing phone's SIM card (if the user has an unlocked tri- or quad-band GSM phone) or purchase an additional prepay phone.

This approach, although more cost effective for inbound and in-country outbound calls to/from the user, has several disadvantages for the enterprise environment that should be considered:

* The user does not receive calls placed to his existing (domestic) wireless phone number (although a customized voice mail may encourage callers with urgent business to call the new number).

* The user incurs international charges for retrieving voice mail from his home phone. Also, many foreign prepay providers will not allow international outbound calling, therefore requiring the user to find an alternative phone to retrieve voice mail.

* Callers to the user's new (foreign) phone are required to incur international charges.

* Prepay providers typically have limited billing capabilities that may not meet corporate expense management requirements.Leverage Third Party Provider Solutions

The high price roaming charges has encouraged third-party providers to find a way to circumvent the fees. At least one company, for example, will provide a SIM card or phone and a "find me" number from the home country, which automatically routes to the mobile phone in the foreign country. The subscriber then forwards their domestic mobile number to the (domestic) "find me" number. Incoming calls to the domestic number are then routed to the roaming cell phone at approximately 30% of the cost of traditional roaming rates. While this option requires increased overhead, including a different SIM card per country, it is certainly an improvement over renting local phones while overseas.

Another solution, which is typically used by individuals and smaller businesses, utilizes Skype. The subscriber obtains a "SkypeIn" phone number and configures that number to be forwarded to the foreign cellular (generally prepaid) phone number.For example, a subscriber might obtain and use a U.S. phone number from Skype and, when in the United Kingdom, purchase a U.K. prepay cell phone and configure the Skype account to forward calls to the U.K. cellular number. By forwarding the user's U.S. cell phone number to the Skype number, an end-to-end call forwarding scheme from the U.S. cellular number is achieved.

As incoming cellular calls are typically free (the United Kingdom, as with most international markets, utilizes calling-party-pays), the cost of these calls to the roaming subscriber is equivalent to the cost of an international mobile-terminating call from the VoIP provider (typically around 25 cents per minute).

Venture into enterprise fixed mobile convergence solutions

Another alternative that is becoming viable is dual-mode Wi-Fi/cellular devices, which enable users to circumvent the cellular network and associated fees. This option works well for outbound calling where the user can specify the connection type, such as Wi-Fi preferred over cellular, effectively going around the cellular provider. However, inbound calling remains problematic because the location information for the device is not available to the home provider to enable call routing.This issue can be addressed by enterprise fixed mobile convergence (FMC) solutions. Many vendors, noting employee reliance on and preference for cellular devices, are developing FMC capabilities within their unified communications (UC) products. Dual-mode phones, when used in combination with UC solutions and VPN technology (effectively making any Wi-Fi network an extension of the corporate LAN), enables users to make and receive calls as if on a corporate extension.While FMC is a relatively new technology, a number of companies are exploring or piloting such solutions with a key component of the business case derived from avoiding roaming fees.

Vendor solutions currently available require integration with the enterprise UC solution, and dual-mode handsets (e.g., models from HTC, Nokia E- and N-series, Palm Treo Pro) that can support an installed VPN/FMC client. Notably, BlackBerry devices are not supported by the main FMC solutions, which may limit the utility of these solutions in many enterprises. The main options currently available include:

* Agito RoamAnywhere Mobility Router and Secure Remote Voice (SRV) capability (with support for a variety of enterprise UC solutions from vendors such as Avaya, Cisco, Nortel).

* Divitas Mobile Unified Communications (with support for a wide range of enterprise UC solutions). Divitas was recently selected as Avaya's preferred dual-mode mobility solution partner.

* Siemens OpenScape Voice and UC Server, with HiPath MobileConnect.

While these solutions clearly show a lot of promise for mitigating roaming charges in locations with Wi-Fi connectivity, FMC is in a relatively early stage of development and there hasn't been a significant deployment of these solutions within enterprises.The cost of international roaming for U.S. subscribers is undeniably high. And while enterprises can cut down on these expenses by using provider plans or negotiating rates, the recharging structure and lack of leverage limits the savings available to approximately 30% to 40%.

Unless roaming rates become more reasonable, an enterprise with significant spend in this area may wish to consider using demand management and third-party solutions -- along with FMC enterprise solutions as they become more proven -- to further control international roaming costs.

Shaw is a principal at Pace Harmon, an outsourcing advisory services firm providing guidance on complex outsourcing and strategic sourcing transactions, process optimization and vendor program governance. He can be reached at

This story, "How to reduce international roaming costs" was originally published by Network World.

Copyright © 2009 IDG Communications, Inc.

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