By Jennifer LeClaire / CIO Today. Updated October 10, 2013.
The so-called "uncarrier" is pushing the wireless envelope once again. This time T-Mobile is addressing a pain point for international travelers: roaming charges.
T-Mobile is delivering unlimited global data at no extra charge in more than 100 countries. The company held a concert in New York’s Bryant Park featuring Shakira to help get the word out.
“The cost of staying connected across borders is completely crazy,” said John Legere, president and CEO of T-Mobile U.S. “Today’s phones are designed to work around the world, but we’re forced to pay insanely inflated international connectivity fees to actually use them. You can’t leave the country without coming home to bill shock. So we’re making the world your network -- at no extra cost.”
Making Roaming Predictable
T-Mobile’s market research offers a compelling case for its latest competitive move. The firm noted that Americans take about 55 million trips to destinations outside the U.S. every year. When U.S. customers use their phones abroad the way they normally do at home, their costs often total $1,000 a day or more.
The company’s research shows that more than 40 percent of customers turn off data roaming completely. Another 20 percent say they would if they knew how. The toll these roaming fees take on individuals and businesses is huge and T-Mobile aims to win some customers by eliminating them.
Starting Oct. 31, T-Mobile’s Simple Choice customers get unlimited data and texting and pay a global flat rate of 20 cents per minute for voice calls when roaming in those same countries. The company also introduced the Stateside International Talk & Text feature for discounted calling and texting from the U.S. to all Simple Global countries. For a monthly fee of $10 a month, customers are assured they will never pay more than 20 cents a minute to any number.
The Competition Must Respond
We caught up with Mark Lowenstein, managing director at Mobile Ecosystem, to get his thoughts on the new offers. He told us T-Mobile should be applauded for taking on what he calls the last bastion of 1970s era telecom: international wireless roaming.
“Voice and data roaming costs have been a huge pain point for international travelers. International roaming rates often exceed a 10 times premium for voice, data, or text compared to comparable plans in the U.S. or in users' home countries,” he said. “No longer will travelers have to look at rate tables before embarking on a trip, or have to navigate the maze of "local SIM" and other options they have taken to protect themselves.”
As Lowenstein sees it, the move is an important differentiator for T-Mobile, especially for postpaid users and those in the business market where the company is anxious to gain share. He said T-Mobile appears to be especially going after AT&T, which has been the most aggressive of the U.S. operators in offering international packages of various sorts to subscribers.
There is a downside: the data rate for unlimited data defaults to EDGE-type speeds, which T-Mobile pegs at about 128 Kbps. That might be enough for e-mail and light Web browsing, but it doesn’t compare to what most customers are used to in a 3G and 4G world. Lowenstein said T-Mobile is offering a Speed Boost option at various price scales to solve the problem.
“I expect T-Mobile's competitors, especially AT&T, to respond aggressively,” he said. “I also expect that T-Mobile will eventually improve the standard speed offering that's part of Simple Choice for travelers to include a more generous 3G option, especially as it re-negotiates roaming rates with international operators.”