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Why T-Mobile's New Global Roaming Plan Is An Industry Game-Changer

Dec 30 2013, 8:21am CST | by

 
 

Getting stuck with big bills for global smartphone data roaming is about the dumbest thing one can do these days. The best advice I can give Americans traveling abroad, when it comes to smartphone data use, is to get a SIM card for a local operator when you hit the ground. Or consider a prepaid global SIM card like those sold by Ekit (probably the largest global SIM card company) and other global providers. The second best way to go is to pre-pay for your data. Three of the four major U.S. mobile network operators (Verizon, AT&T, and T-Mobile) have competitive rates for international data roaming if you select one of their prepaid plans. Buying data by the megabyte is just way too expensiveRead my article about how to select a data plan and carrier that has the best deal.

One approach that has been adopted by Verizon and AT&T offers what I call a fixed-price prepayment for an allocated amount of data, usually in 100-120 MB chunks, for an average cost of $0.25 per megabyte. Compare this volume approach to these carriers’ standard rates of $15 to $20 for each MByte, and it would appear that you’re getting a reasonable deal (a local SIM is still almost always better).

On October 20, T-Mobile changed the way you can use your smartphone in more than 100 foreign countries. Its new pricing structure made it eminently more affordable to make and receive voice calls, as well as doing all your emailing and Instagramming on the Champs-Elysees. It remains to be seen whether T-Mobile’s move will be a game-changer in the industry. Other carriers would have to follow suit. But it is an attractive alternative to more expensive choices presently offered by AT&T and Verizon, albeit with certain limitations. AT&T just announced a new LTE roaming agreement with Rogers in Canada for U.S. customers but did not change its roaming rate plans. AT&T declined an interview to discuss any plans to reduce other international data roaming fees to compete with T-Mobile’s latest offering.

T-Mobile’s Simple Choice plan allows certain customers to roam in about 116 countries as if they were at home. Unlike on any other carrier, you can make or receive a voice call on the cellular networks in these 116 countries for a flat $.20 per minute, whether to or from a landline or cell phone. If you compare that to an average of $1.29 per minute (or even much higher) in many of the covered countries it is a very attractive deal. Even with local SIM cards the rates to call other mobiles or landlines can be more than $.50/minute. T-Mobile’s senior vice president of marketing Andrew Sherrard told me that the company expects a lot of business customers to switch over to his network because of the potential savings.

For the past three weeks I have been traveling in India and Bhutan using the new T-Mobile service offering. I made a lot of calls to local phone numbers in India and back to America. I just received my bill, and all calls were priced at the $.20/minute rate. The data side of the plan gets a bit more questionable as to its usefulness or utility, although for certain users it will save money and solve roaming issues.

We are spoiled in the U.S when we use our mostly-4G or LTE data networks. We expect instant downloads and almost cannot remember the days of 3G, which were at least one tenth the speed of current 4G systems, let alone the days of 1x, EDGE, and GPRS. It was like using a 1200 baud modem at the beginning of the Internet revolution. 2G networks in the U.S. are essentially a thing of the past and have all but disappeared in most systems. Well, not in the T-Mobile plan, nor in many places in the world, like India and Bhutan.

Access to 2G data is being offered for free in all of the T-Mobile included countries. What that really means is the ability to send and receive email without large attachments, and to transmit and receive pictures, but at a pitifully slow speed in many places.  The good news is that in some areas there is no 2G service so your phone will revert to 3G, at no charge. That means that it works like the old days in the U.S. which we all thought were great until the networks were upgraded to higher speeds.

For the occasional traveler, the T-Mobile offering is a very good deal but very frustrating, especially if you are trying to access any large files or even doing real-time navigation. When we tried to use Google maps navigation near Agra (where the Taj Mahal is located and where roads are almost impossible to navigate without GPS), the cows in the road were literally moving faster than the maps were updating on Google! So much for 2G!

I tolerated the slow speeds in India for about four days before I had had enough and needed to return to the 3G future (the highest speed in India) by purchasing what T-Mobile calls Day Passes,  or higher speed chunks of data. T-Mobile clearly understood that 2G would be a leader item to get many of their customers to upgrade to real data speeds. There are three rate tiers, all of which have a twist unlike that offered by any other carrier for fixed-price data allocations. Whereas AT&T and Verizon have adopted plans that are based upon a thirty-day billing cycle, T-Mobile has very cleverly figured out how to sell data for a significantly lower price per megabyte but for slices of time which range from one day to two weeks.

For the majority of travelers who are overseas less than 14 days, it is actually a smart idea. I purchased a 500 MByte data pass for $50, which works out to $.10/MByte; the lowest rate in the industry. The pricing on the single-day pass is $15/100 MBytes, and the 7-day pass is $25/200 MBytes.

Free calling option on your cell phone from the U.S. to 74 countries

If you spend another $10 per month, you can have unlimited free calling from the U.S. to the following 74 countries, which are part of the 116 countries included in the Simple Choice plan:

Aland Islands, Argentina, Australia, Austria, Bahrain, Belgium, Bermuda, Brazil, Bulgaria, Canada, Chile, China, Christmas Island, Colombia, Costa Rica, Cyprus, Czech Republic, Denmark, Dominican Republic, Easter Island, Estonia, Faroe Islands, Finland, France, French Giana, Germany, Greece, Guadeloupe, Hong Kong, Hungary, Iceland, Indonesia, India, Ireland, Italy, Japan, Kuwait, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Martinique, Mexico, Netherlands, New Zealand, Norway, Panama, Peru, Poland, Portugal, Romania, Russia, Singapore, Slovakia, South Africa, South Korea, Spain, St. Barthelemy,, St. Martin, Svalband, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, Uruguay, Uzbekistan, Vatican City, Venezuela, Vietnam, Zambia

 Countries not included in the free dialing plan from the U.S.

The following 42 countries cannot be dialed under the free calling option from the U.S., but are included in the $.20/minute rate when you travel or call to these areas.

Anguilla, Antigua and Barbuda, Armenia, Aruba, Barbados, Bolivia, Bonaire, British Virgin Islands,  Cambodia, Cayman Islands, Curacao, Dominica, Ecuador, Egypt, El Salvador, Ghana, Grenada, Guatemala,  Guyana, Iraq, Israel,  Jamaica, Kenya, Moldova, Montserrat, Netherlands Antilles, Nicaragua, Pakistan, Philippines, Qatar, Saudi Arabia, Saint Maarten, Sri Lanka, St. Kitts and Nevis, St Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, Turkmenistan, Turks and Caicos Islands, Ukraine, United Arab Emirates. />/>

Limitations and restrictions of the T-Mobile plan

There are a few important conditions in order to take advantage of this plan that you need to be aware of:

  • You cannot be continuously outside of the U.S. for more than 35 days before your plan will be subject to review or cancellation;
  • Your overseas data usage should not be greater than your average usage within the United States for any billing period;
  • The plan is only for post-paid customers; no prepaid service is allowed;
  • Covered countries are subject to change at T-Mobile’s discretion;
  • Additional taxes may be imposed in certain countries;
  • T-Mobile Wifi calling is not available with i Phones;
  • Tethering is not permitted;
  • The plan is not for extended international use and primary usage must occur within the United States;
  • Your phone must be registered in the U.S. prior to foreign usage;
  • Your service can be terminated or restricted for excessive foreign roaming, or for misuse;

Compare Post-Paid and Prepaid global plans

The T-Mobile plan has a lot of advantages in comparison to prepaid SIM cards offered by EKit and other providers. I interviewed Ken Grunski, current president of global retail sales of Ekit, for his take on the T-Mobile offering.

He thought it was a good deal, but with some caveats which could be important to certain travelers. He pointed out a few significant issues:

  • You must be a customer of T-Mobile, whereas prepaid SIM card providers do not require any other service plan as a prerequisite;
  • Ekit and other global SIM card providers target users who want broadband coverage, rather than restricted bandwidth;
  • The T-Mobile plan is appealing, especially for unlimited roaming and SMS service, as well as a flat-rate for voice calls;
  • The Simple Choice plan requires a minimum commitment of $50/month, whereas prepaid cards have no monthly costs other than what you use;
  • Bandwidth at 2G will offer up to 128 Kbps, which is a good backup while roaming. The limited data speed will not support streaming, transfer of large files, but will work for emails, small images, and use of social networks. From personal experience I can attest to the fact that navigation capability is marginal;
  • The plan will not allow tethering, although I was able to use personal hotspot service, albeit extremely slow;
  • The performance of some of the T-Mobile roaming partners may be questionable and speeds may be limited to 56 Kbps in certain areas;
  • Data bundles offered by Ekit and other carriers may be priced about the same as T-Mobile, or even less expensively when you factor in the monthly minimum service commitment;
  • Many of the global SIM providers configure their cards with both U.S. and UK phone numbers, which means if you receive a call on a GSM network through their foreign roaming partner, you do not have to pay for the call (the calling party does). T-Mobile does not offer this option;
  • When using Prepaid SIM cards, generally there are no restrictions as to tethering, and 3G speeds are usually available;
  • Data bundles usually have a thirty day life, which means you don’t have to worry about expiring plans.

T-Mobile Data Passes: Are they a good deal?

Because many Simple Choice customers may not be able to live with 2G speeds while roaming in foreign countries, the option is to purchase broadband data passes on a daily, weekly, or bi-weekly basis. If you choose one of these plans, the issues you need to consider include:

  • Data passes only charge for the prepaid rate at the time it is activated so you can control when the plan is turned on;
  • Passes have expiration dates that are much shorter than for other carriers, but the advantage is that they are less expensive per MByte rates if you do not travel for longer periods;
  • Data passes allocate a specific amount of data for a fixed price, whether you use all or part of the allocation;
  • The passes do not automatically renew as with Verizon or AT&T, so you need to be careful to monitor usage and warning messages because you could incur huge charges if you keep consuming data after the plan expires;
  • An SMS will be sent to you when your plan is active and when it expires;
  • You can purchase data passes on-line;
  • Data passes are in effect for a specific period, regardless of your billing cycle;
  • Data passes do not work everywhere. You should check the T-Mobile site for a current list of covered countries;
  • Passes are designed for short trips and low data usage;
  • If you have a T-Mobile Simple Choice account, you can add a tablet at no extra charge for international 2G roaming.

Other things you can do to limit your data costs:

I have a few other suggestions to limit your data usage while traveling:

  • Use WiFi whenever possible if it is free. Unfortunately, hotspot service has become a secondary global communications network much like cellular but is priced at a lower rate. Roaming between WiFi providers is available in many domestic and foreign locations. The cost per MByte may be significant if the bandwidth is limited and if you purchase access for a limited period of time, such as one hour;
  • Turn off data roaming on your smartphone;
  • Disable automatic software updates;
  • Disable Push notifications, if possible, because your phone is constantly communicating with the network and consuming data.

The T-Mobile global offering is presently unique in the industry and will surely be welcomed by infrequent travelers because it will largely eliminate their need to purchase separate fixed-price data packages. For business users the most advantageous benefit is the low per-minute voice rates, especially in certain regions where calls are prohibitively expensive. Whether they will put up with 2G speeds is an open question which did not take me long to answer in Delhi and Agra.

The international roaming business and deep discounting of rates is continuing to grow. There are new high-tech players on the horizon that may offer even more unique solutions, targeting certain high-traffic areas of the world with real pricing advantages for voice, data and text messaging. I will be interviewing a company in Canada next week that has developed what appears to be a clever way to turn your phone into a dual-SIM handset to allow you to accomplish least cost routing, based upon your location, to optimize your costs for roaming services. Stay tuned.

Source: Forbes

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