October 10, 2013
T-Mobile Nixes Global Roaming Fees, Shaking Up The Industry Once Again
Michael Harper for redOrbit.com - Your Universe Online
T-Mobile is once again making a name foritself by doing business in a way no other carrier would. In March, the company branded themselves as the “uncarrier” by getting rid of contracts and offering unlimited data and voice plans on the cheap. Now Big Pink will allow subscribers to make voice calls and send text messages internationally without outrageous roaming fees.
The free feature, called Simple Global, will kick in for all customers starting on October 31. Calls made from China, France, Japan, Spain, Russia and nearly 100 others countries will cost customers 20 cents and text messages will be sent for free. This announcement, made in partnership with international pop star Shakira, is the third this year which tackles some of wireless customers’ biggest grumbles. In July T-Mobile launched Jump, a service which allows customers to upgrade devices up to twice a year for $10.
“Today’s phones are designed to work around the world, but we’re forced to pay insanely inflated international connectivity fees to actually use them,” T-Mobile CEO John Legere told Bloomberg.
Legere also took the time to give an update on his company's ongoing 4G rollout, which is now available to 200 million people in 233 cities.
T-Mobile, the smallest of the large carriers, likely feels emboldened by their size. This announcement doesn’t eliminate the necessity of roaming charges, of course, and somewhere along the line someone must pay the bill. When asked who would be left picking up the tab for roaming calls, Legere said he expected to sign so many new subscribers that cost wouldn't be an issue.
“We just changed the game to where our coverage map is now the world,” he said in an interview with the New York Times. "Our network is now by far a much bigger coverage area that AT&T and Verizon combined."
“I don’t care if the others copy us. If AT&T and Verizon tried this it would be a negative hit to their profitability.”
These sort of wild moves have so far been good for T-Mobile. They saw more subscribers in their second quarter than they had in the last four years. Following the release of their no-contract plans - and, perhaps most notably, the first T-Mobile compatible iPhone -business boomed for Big Pink as more than one million people either left their existing carrier or joined for the first time. They also saw fewer people leave the service. Even with a net gain in suppliers, the company still reported a $16 million quarterly net loss, but reported a total profit of $107 million last year.
It’s likely AT&T and Verizon won’t be following this move as they did after T-Mobile announce JUMP, or “Just Upgrade My Phone.” Weeks after the announcement the nation’s two largest carriers announced plans for their own early upgrade options which essentially let customers pay off the cost of an unsubsidized phone throughout the length of a newly renewed contract.
They might be making waves, but they’ve still got plenty of catching up to do. Legere proudly mentioned the expansion of their 4G LTE network, but they’ve yet to have the same kind of coverage (and speed) as AT&T and Verizon.