A major challenge when travelling internationally is to remain connected without breaking the bank. In the second of a series of articles on travel technology, ARTHUR GOLDSTUCK declares war on bill shock.
We may have defeated the monster of interconnect fees that have needlessly inflated cellular bills over the years, but there is another demon to be fought. It may affect fewer people but, for those it does, the effect is far more severe.
It is called roaming, and it represents a monumental assault on both the rights and the budgets of travellers. The worst offender is data use on a phone. The highest price one can pay for data as a South African user in this country is R2 per Megabyte of data downloaded or uploaded, and even that is exorbitant. For those who can afford it, buying a data bundle brings the price down to less than 10c per Megabyte.
Out of the country, however, if you forget to disable mobile data while roaming, the cost can shoot up to as much as R150 per Megabyte. To put that in context, using up a typical bundle costing around R200 for 1 Gigabyte in South Africa will suddenly cost R150 000. And no, that’s not a misprint.
The European Union has recognised the rapacious nature of such rates and dictated a cap of 20 Euro cents for mobile customers of operators within the EU, roaming within the EU. In other words, it doesn’t apply if you come from elsewhere. That means South Africans still have no protection there. The International Telecommunications Union has looked at the issue from a global perspective, but appears to lack the teeth to do much more than “look”.
Part of the problem is that roaming rates are based on bilateral agreements between networks, since there is no cross-border regulator that can enforce rates.
Of course, mobile operators themselves should be more vigorous in addressing the issue. After all, the likes of Vodafone and MTN have vast international networks that could contribute significantly to the debate. However, networks benefit hugely from customers of other networks roaming on their own networks, and have demonstrated little enthusiasm for killing the goose that lays this diamond egg.
In the same way, they fought tooth and nail against the cutting of interconnect fees in South Africa, arguing it would force them to increase rather than decrease the cost of calls. No one was buying the argument then and, half a dozen cost cuts later, the disingenuousness of the argument has been thoroughly exposed. Right now, we have the same kind of disingenuous arguments around roaming rates.
So, before providing a weapon in the fight against bill shock, let it be firmly stated: the current high international roaming rates for data are unjustifiable, indefensible, and unconscionable. The networks should expect no sympathy or understanding for their arguments justifying the rates. “Just do something about it,” is the message of the consumer.
The obvious cure for roaming data is to have a mobile Wi-FI device, commonly referred to as a Mi-Fi, although MiFi is in fact a brand name for a mobile Wi-FI device first manufactured by Novatel. In South Africa, most such devices are manufactured by Huawei, with ZTE and Alcatel also players.
One then needs to pick up a local data SIM card the moment one lands at a foreign airport. The problem is that, at many airports, no such option is available. In some cases, like at Heathrow in the UK, one can pick up incredibly cheap SIM offering unlimited data for a month at less than £20.
At JFK in New York, a more limited option can cost twice as much.
In the USA, the best current option is to visit a T-Mobile store and pay $40 for a SIM card that offers 1GB of data at 4G speeds, and then unlimited data at around 182 kbps. The store assistants will tell you that it’s not usable at that speed and you should pay twice as much for a bigger bundle, but the slower option is in fact quite effective for anything ranging from e-mail to WhatsApp and basic browsing on a phone.
In many countries, even better options are available, but in others the cost is prohibitive. The more countries one visits, the more complex the process becomes.
The best option is, on arrival at a foreign airport, hiring a Mi-Fi device that includes a data SIM card and data allowance, but this also depends on the luck of the airport draw. So far, I’ve found such options at reasonable prices only in Tokyo and San Francisco.
The ideal, of course, it to have an option that is set up even before one departs, and that works anywhere, across countries, cities, airports, transit lounges, and points between. And, fortunately, there is just such an option.
I was rescued on a recent trip through several countries by a device called PocketWifi, from South African company ExceMobile. It looks like a fat Mi-Fi, but its magic is on the inside. It contains no less than six SIM cards, each representing agreements with networks that cover almost every country in the world. One of them also acts as a master SIM through which the device is updated when needed.
The cost of usage may not seem low at first site: ranging from R199 to R349 per day, depending on the country, with 300MB of data included in the rate and a new bundle applied as one uses up each bundle.
High, maybe, but faced with the alternative, of up to R150 for 1 MB, it is not only viable, but is also an obvious solution.
On a recent brief trip that covered Germany and Poland, I incurred an ExecMobile bill of R996, which is high compared to my usual local bill. But the cost, had I been on mobile data roaming on the phone, would have been – hold your breath – R72 300 on MTN, and R73 472 on Vodacom.
Okay, breathe now. It’s okay. You’re going to be fine. You weren’t roaming.
Or were you?
VoD cuts the cord in SA
Some 20% of South Africans who sign up for a subscription video on demand (SVOD) service such as Netflix or Showmax do so with the intention of cancelling their pay television subscription.
That’s according to GfK’s international ViewScape survey*, which this year covers Africa (South Africa, Kenya and Nigeria) for the first time.
The study—which surveyed 1,250 people representative of urban South African adults with Internet access—shows that 90% of the country’s online adults today use at least one online video service and that just over half are paying to view digital online content. The average user spends around 7 hours and two minutes a day consuming video content, with broadcast television accounting for just 42% of the time South Africans spend in front of a screen.
Consumers in South Africa spend nearly as much of their daily viewing time – 39% of the total – watching free digital video sources such as YouTube and Facebook as they do on linear television. People aged 18 to 24 years spend more than eight hours a day watching video content as they tend to spend more time with free digital video than people above their age.
Says Benjamin Ballensiefen, managing director for Sub Sahara Africa at GfK: “The media industry is experiencing a revolution as digital platforms transform viewers’ video consumption behaviour. The GfK ViewScape study is one of the first to not only examine broadcast television consumption in Kenya, Nigeria and South Africa, but also to quantify how linear and online forms of content distribution fit together in the dynamic world of video consumption.”
The study finds that just over a third of South African adults are using streaming video on demand (SVOD) services, with only 16% of SVOD users subscribing to multiple services. Around 23% use per-pay-view platforms such as DSTV Box Office, while about 10% download pirated content from the Internet. Around 82% still sometimes watch content on disc-based media.
“Linear and non-linear television both play significant roles in South Africa’s video landscape, though disruption from digital players poses a growing threat to the incumbents,” says Molemo Moahloli, general manager for media research & regional business development at GfK Sub Sahara Africa. “Among most demographics, usage of paid online content is incremental to consumption of linear television, but there are signs that younger consumers are beginning to substitute SVOD for pay-television subscriptions.”
New data rules raise business trust challenges
When the General Data Protection Regulation comes into effect on May 25th, financial services firms will face a new potential threat to their on-going challenges with building strong customer relationships, writes DARREL ORSMOND, Financial Services Industry Head at SAP Africa.
The regulation – dubbed GDPR for short – is aimed at giving European citizens control back over their personal data. Any firm that creates, stores, manages or transfers personal information of an EU citizen can be held liable under the new regulation. Non-compliance is not an option: the fines are steep, with a maximum penalty of €20-million – or nearly R300-million – for transgressors.
GDPR marks a step toward improved individual rights over large corporates and states that prevents the latter from using and abusing personal information at their discretion. Considering the prevailing trust deficit – one global EY survey found that 60% of global consumers worry about hacking of bank accounts or bank cards, and 58% worry about the amount of personal and private data organisations have about them – the new regulation comes at an opportune time. But it is almost certain to cause disruption to normal business practices when implemented, and therein lies both a threat and an opportunity.
The fundamentals of trust
GDPR is set to tamper with two fundamental factors that can have a detrimental effect on the implicit trust between financial services providers and their customers: firstly, customers will suddenly be challenged to validate that what they thought companies were already doing – storing and managing their personal data in a manner that is respectful of their privacy – is actually happening. Secondly, the outbreak of stories relating to companies mistreating customer data or exposing customers due to security breaches will increase the chances that customers now seek tangible reassurance from their providers that their data is stored correctly.
The recent news of Facebook’s indiscriminate sharing of 50 million of its members’ personal data to an outside firm has not only led to public outcry but could cost the company $2-trillion in fines should the Federal Trade Commission choose to pursue the matter to its fullest extent. The matter of trust also extends beyond personal data: in EY’s 2016 Global Consumer Banking Survey, less than a third of respondents had complete trust that their banks were being transparent about fees and charges.
This is forcing companies to reconsider their role in building and maintaining trust with its customers. In any customer relationship, much is done based on implicit trust. A personal banking customer will enjoy a measure of familiarity that often provides them with some latitude – for example when applying for access to a new service or an overdraft facility – that can save them a lot of time and energy. Under GDPR and South Africa’s POPI act, this process is drastically complicated: banks may now be obliged to obtain permission to share customer data between different business units (for example because they are part of different legal entities and have not expressly received permission). A customer may now allow banks to use their personal data in risk scoring models, but prevent them from determining whether they qualify for private banking services.
What used to happen naturally within standard banking processes may be suddenly constrained by regulation, directly affecting the bank’s relationship with its customers, as well as its ability to upsell to existing customers.
The risk of compliance
Are we moving to an overly bureaucratic world where even the simplest action is subject to a string of onerous processes? Compliance officers are already embedded within every function in a typical financial services institution, as well as at management level. Often the reporting of risk processes sits outside formal line functions and end up going straight to the board. This can have a stifling effect on innovation, with potentially negative consequences for customer service.
A typical banking environment is already creaking under the weight of close to 100 acts, which makes it difficult to take the calculated risks needed to develop and launch innovative new banking products. Entire new industries could now emerge, focusing purely on the matter of compliance and associated litigation. GDPR already requires the services of Data Protection Officers, but the growing complexity of regulatory compliance could add a swathe of new job functions and disciplines. None of this points to the type of innovation that the modern titans of business are renowned for.
A three-step plan of action
So how must banks and other financial services firms respond? I would argue there are three main elements to successfully navigating the immediate impact of the new regulations:
Firstly, ensuring that the technologies you use to secure, manage and store personal data is sufficiently robust. Modern financial services providers have a wealth of customer data at their disposal, including unstructured data from non-traditional sources such as social media. The tools they use to process and safeguard this data needs to be able to withstand the threats posed by potential data breaches and malicious attacks.
Secondly, rethinking the core organisational processes governing their interactions with customers. This includes the internal measures for setting terms and conditions, how customers are informed of their intention to use their data, and how risk is assessed. A customer applying for medical insurance will disclose deeply personal information about themselves to the insurance provider: it is imperative the insurer provides reassurance that the customer’s data will be treated respectfully and with discretion and with their express permission.
Thirdly, financial services firms need to define a core set of principles for how they treat customers and what constitutes fair treatment. This should be an extension of a broader organisational focus on treating customers fairly, and can go some way to repairing the trust deficit between the financial services industry and the customers they serve.