Market Insight

T-Mobile USA innovates with new roaming plans

October 13, 2013

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T-Mobile US unveiled its highly competitive roaming pricing. From October 31st, subscribers on its "Simply Choice" price plans will have access to unlimited 2G data speeds and texts while travelling to over 100 countries, and minutes will be priced at a flat rate of 20 cents. Subscribers on other price plans can activate this option for $10/month.

In addition, calling countries on its "Simply Global" list from the US will cost consumers 20 cents per minute. Texting those countries will be free, and calls to landlines in 70 countries will also be free.

3G-speed data roaming packages are available at 100MB for 1 day at $15, 200MB for 1 week at $25 and 500MB for 2 weeks at $50.

Having addressed long term contracts, and lack of device upgrades, T-Mobile now plans to address the expensive roaming charges for US citizens travelling abroad. It is not the first carrier to remove roaming fees; Three Europe allows its subscribers to access their price plans from other countries where Three has a presence, but T-Mobile is more comprehensive by covering over 100 countries. Aside from T-Mobile and Three, the European Commission has been addressing roaming by setting upper limits on roaming fees, with a long term vision to remove them completely within Europe.

Prior its series of "un-carrier" announcements, T-Mobile US had fallen behind and was the smallest of the "Big 4" US carriers. Its merger with AT&T was stopped by the regulators and it found itself unprepared for the introduction of 4G.

This is T-Mobile's third big announcement. Initially, it removed long term contracts and decoupled the cost of smart phones from the monthly service charge. Second, it introduced an early upgrade programme, allowing consumers to upgrade their devices before their respective contracts or equipment instalment fees were completed. T-Mobile's disruption has been acknowledged with AT&T, Verizon and Sprint reacting by launching similar early upgrade plans.

T-Mobile's new international calling and texting fees (from the US to abroad) could challenge over the top (OTT) communication apps which bypass mobile services and offer free communications globally.  However, from an apps perspective, instant messaging apps will benefit greatly from this announcement, as they consume minimal amounts of data. More bandwidth-hungry services such as media streaming will see minimal impact as 2G connections cannot handle video streaming.

Enterprise customers will also be among the big beneficiaries as they will no longer have to cover large roaming bills to ensure employees are connected on business trips. 2G data speeds will not be fast enough to stream video or music, but will be sufficient to check emails or download a PDF attachment. Recreational travellers will also benefit from the 2G data and unlimited texts, allowing them to stay in touch with friends and family back home via unlimited texts or instant messaging. Since the limited mobile data speeds will not be suitable for uploading photos, social media users may choose to buy one of the higher speed roaming packages.

Having established its message to consumers, T-Mobile hopes to continue its recent success, and with its LTE network now live in over 200 US markets T-Mobile may have turned its fate around.

USA World
Hutchinson T-Mobile
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