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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Filed Under: international roaming, mobile phone service
Companies: t-mobile
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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!
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Not exactly a result of "free market" solving the issue.
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Question on profit margin
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Competition never harms the customers.
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Close but no Cigar
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Re: Question on profit margin
"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.
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Tmobile coverage
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Rent too high!
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If you are travelling overseas from the US for longer than a month, you would probably already be getting a second mobile line (or a DT international roaming upgrade)
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If not and you object so much to the charge, why don't you use the free option or wifi instead since nobody's forcing it on you as the only option?
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Re: Rent too high!
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.
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Avoid Roaming Altogether
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Re: Rent too high!
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.
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one more customer friendly thing t-mobile does
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Re: one more customer friendly thing t-mobile does
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PCC Mobile Broadband
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Turning on Airplane Mode Offshore is the norm.
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