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T-Mo Changes International Roaming Rates Dramatically

Long time readers may recall a post here in July entitled “Are Cell Phone International Calling Rates Legal?” While the cellular establishment probably viewed this as just more criticism, one of the big 4 was planning a bold move.
The
Wall Street Journal, no friend of government regulation, had previously described horror stories about how both voice and data use abroad could run up huge bills. (The linked WSJ article also gives tips for avoiding these charges.)

John Legere, T-Mobile’s chief
“The most dangerous man in wireless” -
CNET

TMOBILE-Legere

Yesterday, T-Mobile announced a major change in international roaming rates for US consumers. WirelessWeek reported:

Starting October 31, Simple Choice individual and business customers will automatically get unlimited data and texting in more than 100 Simple Global countries worldwide, and will only pay a global flat rate of .20 cents per minute for voice calls when roaming in the same countries. No activation or extra monthly fee necessary.


Furthermore, WirelessWeek wrote:

John Legere, T-Mobile's outspoken CEO, describes international roaming fees as "completely crazy,” and last night he resolved to do something about it.


The New York Times commented

Often, travelers have to pay an extra $100 to their provider to get any cell service abroad. Or they must sign up for a short-term plan with a carrier in the country they are visiting.


BloombergBusinessWeek’s headline describes T-Mo as “shaming competitors”. Bloomberg also writes “Legere claimed that carriers’ profit margins on international roaming fees can be about 90 percent.”

Your blogger avoids this problem by having an unblocked basic GSM phone he bought in Asia for $25 that he buys a new SIM card for while visiting each country overseas. It is a pain, but a lot less than charges from US carriers prior to T-Mo’s announcement.

Since competitive international charges from US to most industrialized countries are under $.20/minute now, why did the cellular carriers ever charge such high rates? Hopefully this change means that competition in the cellular industry is becoming more effective.

While T-Mo is fine tuning its rates for cell calls from US to overseas, those rates are, in the opinion of your blogger, illegal. The T-Mo rates are $1.99/minute to most of Western Europe, rising to $2.69 and higher for developing countries. This in a world where the fair market price for international calls is under $0.20/minute. If you want to pay that type of rate, T-Mo, like all other major carriers, insists you pay $7 or $10/month. This type of pricing is used by all the major cellular carriers at present. If Bloomberg is right about the 90% profit margin, you can see why! I would love to print an explanation from a carrier of why this is consistent with 47 USC 201(b). I don’t think it is. I urge consumers who incur such charges to file an “informal compliant” with FCC and protest the charge as I did once successfully with a Verizon international landline call.

Just like FCC finally addressed the unfairness of high pay phone charges for prisoners, I hope some day FCC gets the cojones to address these anachronistic call rates. Or perhaps T-Mo can use that as another competitive edge...

So kudos to T-Mo for this bold change and let’s hope more competition comes now!

UPDATE

If you want to know why I think the major carriers’ international rates of > $2/minute is illegal and beyond any marketplace rates, check out this photo take in October 2013 of a pay phone in New York City. If this company can charge $1 for a 4 minute call for walk customers it has no relationship with and further has to service the equipment and rent its space, you would think that T-Mo, AT&T, etc. could connect you with an overseas location for comparable prices.

NYC payphone 10 13

But lest you think that T-Mo is suddenly the “consumer’s best friend”, there is this news from spacemart.com in a story ominously titled “Wireless carriers plot death of cheap, unlimited plans”. They report

The first shot in the attack on cheap data plans was fired last week by T-Mobile.
The company said the legacy plans -- many of them featuring unlimited, uncapped data downloading -- will be terminated and subscribers will be moved to comparable but more expensive current plans, the carrier said, because it was "reducing the number of older plans in our systems."

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