Ed note: This article was first published in the June 2013 edition of Nett Magazine. All figures quoted were accurate at time of publication.
Unless you hail from the planet Krypton and have a Superman outfit in your closet, troche chances are that your small business has to pay bills. There are simply things that you have to pay for as it is impractical for you to do it yourself. The most common of these unavoidable bills is utilities. The vast majority of businesses are going to need a fixed-line phone and an internet connection, purchase and you would be hard-pressed to find an entrepreneur that doesn’t have a mobile phone.
These things are crucial to the operation of most businesses and they come with bills. For the most part, sick these bills are predictable when you first start out, but as your business grows the bills can quickly explode as you start rocketing past call caps and bandwidth allowances.
Telco charges have the potential to spiral so far out of control the term ‘bill shock’ is now becoming commonplace. Bill shock is basically receiving a bill that’s so huge it shocks you – usually in the thousands or tens of thousands. The most common causes of this are international data roaming charges (using the internet on your smartphone in a foreign country) and going over your internet data cap.
Data roaming is probably the most extreme example. Victims often end up on dubious television programs like Today Tonight and A Current Affair talking about how they innocently used the internet on a smartphone to check Facebook a few times and came home to a bill with a shocking number of zeroes on it.
This is due to the fact that telecommunications providers have roaming agreements with foreign carriers. For instance, if you are a Telstra customer travelling to the United States of America (USA), you will ‘roam’ onto a partner provider in that country. This means you will be paying $15.36 per megabyte (MB) you download, as opposed to your normal data plan. If you use the internet on your phone a lot, this can get out of control quite quickly.
It’s happening so often that the Australian Communications and Media Authority (ACMA) launched an investigation into the problem, with its draft findings released back in June 2011. Since then, ACMA has effectively put Australian telcos on notice that they have to make it easier for customers to prevent these types of circumstances.
Telstra has launched an SMS alert system designed to minimise bill shock. It works by sending customers a text message when they have used 20 MB of data overseas. This is followed up by reminder alerts when another 20 MB is used and so on. In the example of the Telstra customer going to the USA, each of those 20 MB blocks represents a $307.20 charge. Prices will vary between countries.
“While most travelers will have booked in vaccinations, organised their passport and bought travel insurance, many don’t think to check in with their mobile provider about international roaming,” said Tim Webber, director of Telstra Mobile in a statement. “As smartphones and tablets become even more mainstream, we’re finding some later adopters are less likely to know about data charges – both in Australia and overseas.
“Before flying out we encourage our customers to contact us and make sure they are fully informed about all potential costs and charges of international roaming.”
All of Australia’s telecoms providers have massive data roaming charges. The easiest way to avoid them altogether is to take out your sim card at the airport and buy a $10-$30 sim card at your destination, but this isn’t an option for many business travellers that still need access to their mobile account while on
Elliot Bailey runs a mobile phone repair business called iAdrenalin, and despite his familiarity with the hardware he has been on the receiving end of bill shock. He had just turned his back on a lengthy career as a systems analyst to start his business and had signed up for a Telstra business plan.
“I had recently moved to Telstra due to a change in where I was living – a reception dead zone,” he recalls. “Moving to Telstra fixed the issue, but to match the price point I was on I chose a moderate plan which ended up being grossly underestimated.”
The first bill he was sent ended up being four times what Elliot was expecting.
“After I picked my jaw up off the floor, my mind went through all the ‘I can’t afford this right now’ and ‘how did this happen’ reactions,” he says. “Telstra were great – I asked if I upgraded the plan to the next category could they waive the extra on the bill and the answer was a surprising yes.
“This happened again a few months later, so I upgraded to the unlimited plan,” Elliot adds. “Again the excess bill was wiped with no contract extension so I was stoked. The biggest thing I realised was the extra money [for an unlimited plan] was well worth not having to stress about my phone bill.”
Elliot’s story is not a new one. In a vast number of cases telcos will usually negotiate if you ask – particularly if you offer to go onto a higher payment plan or lock in for a longer period with them. The only thing this requires is opening a dialogue with your provider, and if you get nowhere then you need to complain and escalate until you talk to someone with the authority to negotiate your bill on the other end of the line.
This won’t always be the case, there are times when providers won’t budge, but the fierce competition to retain business customers means it is likely they’ll let one bill go to keep you on as a customer.
Ask the expert
Chetan Khemlani runs online bills and account management company NBF and we asked him for his tips to reduce the chances of bill shock.
• Connect your mobile to your home wireless network via WiFi as much as possible to reduce the data being used on your mobile plan.
• One of the most important things to do is install a usage meter on your mobile phone. These get updated with recent usage every night. My Virgin Mobile has one. It raises the alarm at 80% usage.
• Do not set up multiple direct debits with all of your billers. You effectively lose control of your money. You get a shock when the biller chargers heavy payments direct to your bank account.
• Disable MMS (picture messaging) if possible from your mobile plan.
• Some apps use excessive amounts of data to connect and update regularly. If you don’t need to use them, it is a good idea to delete these or turn off auto-update options on your mobile.
• Billers do not create perfect or honest bills all the time. So be sceptical and self-audit your usage. Electricity bills have often caused problems for many people. The telecoms ombudsman has also registered increasing bill problems in the past few years. You should check your bill usage and charges regularly.
• Whenever possible do not enter into long-term contracts with billers. Especially when you cannot see clear benefits and you feel like you’re being trapped in an offer.