In one scenario, the cost with AT&T would be $1,150 from Canada; in Europe, that cost would jump to around $1,500. The cost on T-Mobile would be $6.40.
International roaming charges are one of the most outlandish rip-offs perpetrated by the mobile operators. In the wireless segment, stories abound of business people and consumers returning from an international trip only to find that they have racked up roaming charges totaling thousands of dollars. The highest one I heard from a client was $13,000 on a 7-day trip! A soon-to-be-published study of international roaming conducted by CCMI found that for 28% of respondents from large enterprises, the average monthly roaming cost per user was over $2,500; for almost half of those it was over $3,500.
In a bid to shake up the mobile industry, T-Mobile, the fourth largest US mobile operator, announced it is expanding its home data coverage for most customers of Simple Mobile (the company's service plan name) starting October 31, to include more than 100 countries at no extra charge. For T-Mobile users in the US wishing to connect overseas, the company announced its new Stateside International Talk & Text feature, where customers will never pay more than 20 cents per minute to any number in any Simple Global country, including mobile-to-mobile calls, which are generally more expensive than calls to landlines. Unlimited texting is also included to all countries. Stateside International Talk & Text is available to most Simple Choice customers for $10 a month.
Speaking about the new service, John Legere, T-Mobile US CEO (who's also something of an industry gadfly) said, "The cost of staying connected across borders is completely crazy.... 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." He also called out the larger carriers' roaming fees, adding that they likely carried a profit margin around 90%.
Legere went on to point out that if a customer used 72 megabytes of data, made 32 one-minute calls back home, and sent 36 text messages a day on AT&T (his favorite target) without an international plan, the cost would be $1,150 if the person was in Canada; in Europe, that cost would jump to around $1,500. The cost on T-Mobile would be $6.40.
International roaming charges have long been a thorn in the side of mobility managers and international travelers, forcing users to subscribe to international roaming plans (which still feature high rates) or simply give up communicating when they are out of the country. The whole arrangement is particularly galling as the US operators routinely place the blame for the high charges on their international roaming partner while sticking it to their partners' customers when they travel to the US.
Proactive customers are already able to get a break on roaming charges by using services like eMobile, Truphone, or iPass. The eMobile service requires the user to swap his/her SIM card when they travel overseas, and forward their US number to another US number which in turn forwards the call to the number on that international SIM. Outbound calls placed from overseas use a trick called USSD Callback,where a message is sent to eMobile’s switch with the number to be called when the user hits the "Call" button. The switch then calls them back, and when they answer, the switch completes the call. International calling rates can be as low as 34 cents per minute- if you can teach your users how to do all of this.
For regular travelers, Truphone offers what is likely the most intuitive approach. Truphone offers customers multiple international numbers on a single SIM card. The SIM will have their US number, and can have additional local numbers in the UK, Hong Kong, Australia, and/or the Netherlands. Correspondents can call Truphone users on any of those overseas numbers regardless of where they are in the world--so they essentially can have "foreign exchange" lines in four countries.
When placing a call from overseas, Truphone routes the call to their nearest switch location. As the user actually has multiple local numbers available, all calls will have a discount. If the user is traveling in a country where Truphone operates (i.e. the “Truphone Zone”), calls to the US can be as little as 9 cents per minute, as the user is getting local rates as opposed to the more-expensive roaming rates. Truphone also offers similar savings for data and text, and offers international shared plans for businesses. Commenting on the T-Mobile announcement, Truphone’s VP of Marketing Pascal de Hesselle said, "Truphone welcomes any announcement that draws attention to the fundamental flaws surrounding international mobile communications. International dialing is expensive, mobile Internet speeds crawl when you're roaming, and yes, the cost is way too high."
If all you need is data, iPass offers an international Wi-Fi roaming service accessible from almost 1.25 million hot spots worldwide in cooperation with about 140 worldwide service partners; customers also get access to a few million community networks like Starbucks and Xfinity. While the company does sell to individuals through their website, its primary revenue source is selling enterprise-wide plans. Of course like any Wi-Fi based service, it is intended for stationary users, and coverage will not be ubiquitous. The company claims that a user will typically "break even" if they travel internationally 4 days per month, and savings can be in the 50% to 85% range over traditional cellular data roaming plans.
Whether T-Mobile's new plan turns out to be a game changer in international roaming remains to be seen. The company's rather poor position among enterprise buyers would seem to indicate that it won't--I don't think AT&T is losing much sleep. However, if it does strike a nerve, maybe we will see a response in some form from the others. In the meantime, the "pain point" of international roaming remains an opportunity for the likes of eMobile, Truphone, and iPass.
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