T-Mobile Bucks Another Crazy Mobile Phone Trend: Dumps International Roaming Charges

from the well,-look-at-that dept

For pretty much the entire history of the mobile phone business, your choice of service providers was mostly dependent on trying to find the least evil provider. They all played the same awful tricks designed to make you pay more — and to hate your service provider in the process. Could it possibly be that T-Mobile has finally decided that it’s going to become the brand that completely shakes that up? Last year we wrote about the company killing off the abusive practice of long term contracts combined with subsidies that actually made you pay much more for your phone while making people think they were paying less. And now they’ve hit back on one of the other favorite gouging places for mobile phone carriers: positively insane international roaming fees that resulted in numerous stories of people suddenly receiving bills over $10,000.

T-Mobile’s response isn’t to just lower the international roaming fees, it’s to get rid of them completely, replacing them with free data access in most countries, and relatively cheap phone calls. The free data plan is fairly slow, but you can upgrade to pay for a faster plan at non-crazy rates (about $15/day — which is actually less than many hotels charge for WiFi). While other mobile carriers have “international plans” it looks like, even if you’re paying up for the “higher levels” of service, T-Mobile’s plans will come out significantly cheaper than any competitor.

I’m not sure my brain can process the idea of a mobile phone company that doesn’t suck and focus on customer disservice over customer utility.

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Companies: t-mobile

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Comments on “T-Mobile Bucks Another Crazy Mobile Phone Trend: Dumps International Roaming Charges”

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PaulT (profile) says:

So, a service that previous tried to rip customers off left and right, often leading to people being wary of using a paid service at all is now offering a “free” option with the chance to pay a reasonable fee for a more valuable product if they so wish?

I wonder if the usual crowd here are going to accept that this is another example of such a model being viable or if they’re just going to whine about anomolies and freeloaders again?

Fair play to T-Mobile, though. Why piss customers off for the potential of a premium that might get fought in court or put people off using the service altogether, when you can guarantee a regular income stream and good will from regular travellers and attract new customers in the process? Here’s hoping that other providers in other countries see the light and offer the same service!

Anonymous Coward says:

could this be because of the drastic changes that have already/ are still going on over in the EU? all the equipment everywhere has been paid for many times over. the various telcos have been ripping customers off for years by forcing them to pay higher rates when out of the country of residence and phoning in, or phoning outside the country of residence. it’s about time it was kicked into touch, like so many other ridiculous pricing schemes. it wont be long before phones as such are a thing of the past, with voip being ever more popular.

Mauricio (profile) says:

Question on profit margin

Does anyone know how much does T-Mobile have to pay carriers in other countries for the service? I know many countries don’t even offer “unlimited data” plans, so it seems weird that t-mobile can afford to do this, unless it’s expecting the positive sentiment in the country to compensate for the losses from this deal.

PaulT (profile) says:

Re: Question on profit margin

Well, the linked article does say the following:

“The company loses money on this: It will sacrifice the revenue it makes from international roaming while still having to pay the carriers its customers use while traveling. But this isn?t a significant business for the company at the moment. International roaming costs made up 2.4 percent of T-Mobile?s revenue last quarter.”

So, yes they are looking to use this as a loss leader, but the above should minimise their losses overall.

On top of that, I’m going to guess they have some deals in place. For starters, they operate in 14 countries themselves according to Wikipedia, so they probably aren’t going to overcharge themselves. There will be existing deals with other companies they don’t operate in, especially in places like Europe (where there’s already pressure not to overcharge, so that’s a big chunk of the “about 100 countries” already.

Finally, while lower speeds mean that people aren’t going to be abusing the free service as much as they could (people aren’t going to be streaming HD video, for example), anyone they convince to switch is a revenue generator for the whole year, not just while on travel. Let’s say someone travels 4 times a year and they dislike the risk from the old setup or just wants peace of mind while they’re abroad. Even if T-Mobile loses money during the 4 months they happen to be travelling, they stand to make up that revenue from less expensive usage in the 8 months they remain at home. Only hardcore long-term travellers stand to lose them money every month, but even then those are people who are probably going to pay the $15/day every day they’re travelling…

There’s a risk, but I’d say it’s a good move.

Ninja (profile) says:

We are talking about data. DATA. Adding an international customer to your network is no different from adding a local. It gets expensive because telcos charge insane fees for others to access their networks. Break those artificial barriers – or rather add competition in the monopolies – and you’ll see these prices shooting straight down. Here there was a huge opening in the market with people porting numbers to other operators and several operators dipping into otherwise closed markets. Result? Free long distance calls for land lines, free calls for phones within your network, unlimited wireless usage (with lower speed of course), unlimited sms and so on. In the broadband market we jumped from 1-10mbit offers to 200mbit (albeit those are still absurdly expensive).

Competition never harms the customers.

RandomMinds (profile) says:

Close but no Cigar

It’s interesting that just as this news comes out… without warning, they cancel my data plan. I have a Nexus 4 bought from Google, My account is in good standing, I have never missed a payment, and I have been with t-mobile for over a decade. This morning I wake up to a message on my phone that my data plan is no longer being honored and to choose a new one… while I didn’t want to choose a new one, I’m happy with what I have, I followed their link to see what it said. That page came up and stated that I couldn’t choose a new plan and to call t-mobile. I called them, they said that the department that handles this is not open yet and I’d have to wait until they were, and in the meantime, I have no data access. International plan or not… shutting off someone’s service, that is in good standing, without any outstanding balance, is NOT good customer service.

PaulT (profile) says:

Re: Rent too high!

“I can buy a lot of crap for that money. We’re all better off buying a local SIM card.”

Go on, do that then. I must have missed the point where T Mobile were making this mandatory rather than just an option that’s still better than hotel wifi or their competitors’ current rates – and they’re still offering you a free data plan that didn’t exist till now as well. Plus you still have free wifi in most cities if you prefer that to the free option.

Chronno S. Trigger (profile) says:

Re: Rent too high!

You go to Europe for two weeks and insist on the faster data plan for the entire time?

I guess to each his own. If I went to Europe for two weeks, I’d want to see Europe not the Internet I can see at home. Go round, see the sites, and still be able to use the GPS without paying an extra cent? Now I want to go to Europe.

M Prushothma Rao (profile) says:

PCC Mobile Broadband

This is a bold step that will probably set a new rates-slashing trend on roaming charges. We expect to see a lot of Operators from different geographical areas form partnerships that enables their subscribers to use the local network without incurring ridiculous roaming charges. There are also solutions in store that enable the roaming subscribers to receive instantaneous alerts on the prevailing local rates as soon as they arrive at their destinations. We expect with these developments, bill shocks on travel to reduce significantly.

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