T-Mobile kills international data roaming fees

NEW YORK--T-Mobile US (NYSE:TMUS) took its "uncarrier" strategy to a new level by effectively killing global data roaming rates in more than 100 countries for customers on its Simple Choice rate plans starting Oct. 31. In addition, the company announced that its LTE coverage is now nationwide, covering 202 million POPs, which is about one quarter ahead of plan. The company has previously said it would reach 200 million POPs by year-end.

In a briefing with the media, T-Mobile CEO John Legere said that this decision to offer international data roaming for free will not hurt the company's bottom line, claiming that competitive carriers such as AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ) make upwards of 90 percent margin on their data roaming rates. "This is not cost that is being passed on to you," Legere said. "We are not burdened that this revenue is not ours."

However, Ovum analyst Jan Dawson told AllThingsD that if T-Mobile customers use more than occasional data overseas, T-Mobile could take a bigger-than-expected financial hit. In addition, Gartner analyst Carolina Milanesi told AllThingsD that T-Mobile currently has a small market presence among businesses, and its price-sensitive customers might not be the type to go overseas and use a ton of data.

T-Mobile executives were vague on the data speeds that customers will receive when roaming. T-Mobile CTO Neville Ray said that customers will be able to download email, surf the web and do social networking but said that the exact data speeds will vary country by country. However, the company will offer various levels of speed boosts to customers who want faster speeds or want to download video. The company is pricing those speed bumps at $15 for 100 MB per day; $25 for 200 MB per week or $50 for 500 MB for two weeks.

By comparison, Verizon charges $25 for 100 MB of data when roaming globally. AT&T charges about $30 for 135 MB.

According to industry analyst Mark Lowenstein, founder of M-Ecosystem (and a frequent contributor to FierceWireless), the data speeds are a downside to T-Mobile's offering. In a research note, Lowenstein said that the unlimited data will default to EDGE-type speeds, which he said was around 128 Kbps. "This might be adequate for e-mail and light web browsing, but I believe that the user experience at EDGE speeds, for wireless users who are becoming increasingly accustomed to 3G+ and 4G speeds, will seem pokey," Lowenstein said.

In addition, T-Mobile will also only charge callers 20 cents per minute for global calls from the U.S. and when roaming abroad in its "Simple Global" countries, which span from European countries to India and China. Customers who subscribe to T-Mobile's Simple Choice plan are eligible for global calling. The company hopes to attract new customers who call frequently abroad with this reduced rate. Depending upon the country, competitive operators typically charge $1 to $2 per minute for overseas calls. T-Mobile said calls to landlines in over 70 of its Simple Global countries are unlimited and included at no extra cost.

For more:
- see this release
- see this fact sheet
- see this AllThingsD article

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Article was updated to show the Simple Choice rate plan with global roaming is effective Oct. 31, not Nov. 1.

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