US mobile operator to scrap data roaming fees for customers travelling abroad
Reuters in New York
T-Mobile US said on Wednesday it would offer cheaper international options – including texting and data downloads with no extra fees for subscribers who are travelling overseas – as it hopes to gain customers from its rivals.
The offering, which also includes unlimited US calls to overseas landlines for a US$10 monthly fee, is the latest effort by the No 4 US mobile operator to distinguish itself from bigger rivals and claw back years of customer losses.
The company, which is also capping overseas voice-roaming charges at 20 US cents per minute, said the new offers will be available for customers roaming in about 115 countries starting at the end of the month. It will be available for customers who sign up for its Simple Choice service plans starting at US$50 per month.
“This is going to be solving one of the biggest pain points that people have,” the firm’s chief executive, John Legere, said before the launch, referring to the extraordinarily expensive mobile-phone bills that often shock consumers.
Legere said operators generate billions of dollars a year at margins as high as 90 per cent from roaming charges that can climb into thousands of dollars for just a short trip.
T-Mobile itself now charges US$10 to US$15 per megabyte of data for overseas data roaming fees, chief marketing officer Mike Sievert said.
However, the company does not expect a decline in roaming revenue as a result of the elimination of data roaming fees, according to Legere, who said T-Mobile’s revenue from travelling customers is far smaller than that of its rivals.
Legere said the company expects to make more money from voice calls, because the new international options would encourage customers to turn on their phones when they are travelling, instead of leaving them at home for fear of excessive fees.
As a result of the change, Legere said, he expects “to get a rather significant customer addition, both on the consumer side and the business side”.