Feature Article

October 10, 2013

T-Mobile Goes After International Providers, OTT Services with Rate Cuts

Yesterday, October 9, T-Mobile US unleashed its latest headache for the carrier world, offering unlimited 2G data and texting worldwide to roaming customers and a global flat rate of 20 cents per minute for voice calls. But OTT players may not be too happy with revised pricing either.

More specifically, T-Mobile announced it expanded its home data coverage for most Simple Choice plan customers to include more than 100 countries at no extra charge. From October 31, both individual and business customers automatically get unlimited data and texting in more than 100 countries covered by the Simple Global plan worldwide, and they will only pay a global flat rate of 20 cents per minute for voice calls when roaming in the same countries. Eligible customers get this automatically and won't have to active anything or pay an extra monthly fee.

The "catch" in the plan is that the free data is only via a 2G network, so you'll effectively average around 12 kbps, which will enable things like simple web browsing, not high-speed video streaming. Users are limited to six free weeks abroad and over a three month period at least half of the data usage should be in the U.S.

Image via Shutterstock

For U.S customers wanting a more affordable way to talk with people worldwide, the newly announced Stateside International Talk & Text feature is available to most customers for $10 a month. It includes unlimited texting to all Simple Global countries and a cap of 20 cents per minute to any number in any country, including mobile to mobile.

T-Mobile says it won't lose much money on the new plan because it wasn't making a lot of money on international roaming in the first place. It expects to make up any losses in more customers over the next nine months, as well as with various 3G HSPA data packages for larger volumes of data.

Yesterday's announcement shouldn't come as a surprise. Earlier this year at CTIA 2013, T-Mobile US rolled out an unlimited international flat rate data roaming plan for businesses, encompassing higher-speed data plans.  Meanwhile, over-the-top (OTT) IP-based services have been picking away at the fat of traditional international voice calling for more than a decade.

For U.S. carriers, T-Mobile's latest move is yet another action designed to bring in more customers and provide incentives for budget-minded customers to move. But OTT players will need to rethink some of their long-held assumptions as well, since T-Mobile US is now providing unlimited international text messaging and international voice rates capped at 20 cents per minute -- both areas once advantages solely claimed by the OTT crowd.   If other international carriers follow T-Mobile's lead, the case for OTT clients on mobile phones starts to weaken a bit.

Edited by Blaise McNamee

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