Does Anyone Know the REAL Roaming Costs Incurred by Carriers?

[snidely]

When VodaFone UK makes a roaming agreement w. ATT or T-Mobile in the U.S., what do they really pay ATT or T-M when a customer of theirs roams here? I am sure it's a small fraction of the HIGH rates they are now charging their customer.
An indication of this outrageous example in my case. I am grandfathered in on intl. roaming rates where T-Mobile charges 29-31 cents for incoming calls in many countries around the world. Present users pay $1/min in most of these countries - but $2 ($3?)/min. in Israel!! This is for incoming and outgoing. On my plan, if I didn't use a callback service and dialed direct, i would be paying 70 cents to $1.70 for outgoing.

Point is - It would seem if T-M weren't still making money on my rate plan, they would cancel it. It would guess that at some point one major carrier will attempt to capture the international roaming market and drastically reduce the rates. If/when this happens, the International roaming SIM is done for.

It would take just one major company to do this. The others would have to follow. Here in the U.S., when Sprint suddenly offered unlimited voice (in and out) for $99/mo., ATT, T-M, and Verizon followed within a couple days. If T-M U.S. offered everyone the same rates I pay, they could capture a lot of the world intl. market. It would pay non-U.S. users to sign up w. T-M here. Incoming 30 cents. Outgoing via callback service, about 7 cents more. European customers could forward calls from their landline to a U.S. number for less than 2 cents.

...mike

[MATHA531]

Originally Posted by snidely

When VodaFone UK makes a roaming agreement w. ATT or T-Mobile in the U.S., what do they really pay ATT or T-M when a customer of theirs roams here? I am sure it's a small fraction of the HIGH rates they are now charging their customer.
An indication of this outrageous example in my case. I am grandfathered in on intl. roaming rates where T-Mobile charges 29-31 cents for incoming calls in many countries around the world. Present users pay $1/min in most of these countries - but $2 ($3?)/min. in Israel!! This is for incoming and outgoing. On my plan, if I didn't use a callback service and dialed direct, i would be paying 70 cents to $1.70 for outgoing.

Point is - It would seem if T-M weren't still making money on my rate plan, they would cancel it. It would guess that at some point one major carrier will attempt to capture the international roaming market and drastically reduce the rates. If/when this happens, the International roaming SIM is done for.

It would take just one major company to do this. The others would have to follow. Here in the U.S., when Sprint suddenly offered unlimited voice (in and out) for $99/mo., ATT, T-M, and Verizon followed within a couple days. If T-M U.S. offered everyone the same rates I pay, they could capture a lot of the world intl. market. It would pay non-U.S. users to sign up w. T-M here. Incoming 30 cents. Outgoing via callback service, about 7 cents more. European customers could forward calls from their landline to a U.S. number for less than 2 cents.

...mike

Well that is sort of what I said in the other thread....it really does gall me about international roaming rates, especially on the part of T Mobile USA when, as I've said at other times, if one roams on T Mobile UK, obstensibly part of the rate is what T Mobile USA has to pay to T Mobile UK for use of their network; well I'm sorry that's analogous to taking money out of the left pocket and putting it into the right pocket...they are both fully owned by Deutsches Telecom. It is a rip off.

The problem is we have only the two gsm carriers in the USA and quite frankly, few Americans think it's important to use a cell phone...all sorts of advice is not to use a cell phone but to use calling cards and use the cell phone only in emergencies. I missed out on the grandfathered rates when I began to understand gsm, sim cards and all that other stuff. So of course, I gravitated to the international cards. I remember a time when I was impressed by Virgin Mobile offering 15p/minute calls to the USA and free reception of calls in the UK...then when I travelled to France I got a French sim, Germany a German sim, Holland a Dutch sim....luckily for me my landline carrier is just about the only one that allows remote call forwarding to international phones although I tried Kall8 and voicestick for call forwarding.....the point is that all this would be unnecessary if T Mobile US offered fair international roaming rates.

But of course people vote with their feet so to speak. As long as people are ignorant of what a rip off T Mo's (and AT&T) international roaming rates are, they will say idiotic things like I don't think 99¢/minute is a bad rate to receive a call on my cell phone in Europe. They just don't get it eh.

I wonder if the bean counters at T Mobile USA have ever really sat down and realized the bonanza they could be missing out on by adjusting roaming rates to what they should be.

[FBlack_111]

Want to hear a huge rip off by T-Mobile? Try making a call from a cruise ship. T-Mobile charges $4.99 a minute. Verizon and Att charge $2.49. This is no bargain either, but a whole lot less than T-Mobile. Don't use your International SIM either on a cruise ship. It costs more than Verizon and ATT, but less than T-Mobile.

[bbob]

Cell phone business is big and a cow they can milk.

don't know what roaming rates are between carriers but the different betewwn usa and europa is that us when calling a cellphone you pay the same as when calling a fixed phone. Looking at a us number you don't know if it's fixed or mobile. On the other side in the US you are paying to receive a call or if you have unlimited you pay through a higher montyl rate.

Now ask yourself the question why is it possible if a buy a dutch callcard having say 400 free minutes I can call for 6-7 cents perminute to other cell phones but when using a normal carrier I pay between 10-20 cents. 7 cents and 20 cents huge difference.

So even locally the phone companies are making some nice money on people calling cell phones.

Than when outside your country they charge even more or splitt the profit jointly btween themselfs and the carrier you are roaming on. Why do you think countries like spain did not like the new maximum eu roaming rates, it cost them lots of money.
My guess is that you will be azed when you hear how low the cost really are.

going forward one will have to see that cellphone use will change. More and more you see unlimited data where you can call voip. At present data roaming is still to expensive but in the near future that will also be cheaper. In the end prices will come down and it's just about paying a fixed price per month for unlimted use, just like you internet connection.

[snidely]

Originally Posted by FBlack_111

Want to hear a huge rip off by T-Mobile? Try making a call from a cruise ship. T-Mobile charges $4.99 a minute. Verizon and Att charge $2.49. This is no bargain either, but a whole lot less than T-Mobile. Don't use your International SIM either on a cruise ship. It costs more than Verizon and ATT, but less than T-Mobile.

Hate to sound as an apologist for the cell carriers -but ships use satellites for internet. That is very expensive. The sat. internet providers charge by the mb. I assume that cell phone services on ship connect the same way.
OTH, there is no excuse for T-M to charge double what everyone else charges.

BTW, maybe it would pay to rent a sat. phone. Think calls are $1 to $1.50/min. Don't know what the rental cost would be.

...mike

[petkow]

Originally Posted by snidely

what do they really pay ATT or T-M when a customer of theirs roams here?

Well, consider what T-Mobile Germany pays when a customer of theirs uses T-Mobile USA? At the end of the day they are both owned by Deutsche Telekom!

Truth is roaming rates are very complex, and based on a lot on factors including reciprocity. However there is a huge difference between what the customer pays and what the network may have to give up as a result of that customer roaming. Roaming is still a huge cash cow to the networks... and nothing they want to get rid of in a hurry! Those who pay less still pay enough! Your 29c "grandfathered" rates still make a profit as do my termination fees when I roam within Europe on a fixed plan from Telfonica/o2 with so called "free incoming".

It is all the more like blatant profiteering when "roaming" costs are incurred across networks that are ultimately owned by the same company. In the parts of the world were people frequently travel around in, a lot of brands are ultimately owned by some huge companies like Vodafone, Telefonica, Telenor, TeliaSonera, T-Mobile, Orange etc.

Of course the EU is sick to the teeth of what they say was nothing more than a money-making rip-off, and after networks refused to self-regulate they stepped in to set caps! Of course, the networks went crazy, saying they would need to increase costs on ordinary domestic calls, and monthly access fees to cover their costs. It is a very sour and controversial issue here, but at the end of the day, the customer has benefitted somewhat. However, let's not forget how much these networks had to pay to the same governments who are now regulating them. Vodafone UK for example paid almost 6 billion pounds to the UK government for their share of the 3G spectrum!!!

Anyhow, international regulation of this type can only occur in something as bizarre as the EU. These things cannot really occur across the world!

[MATHA531]

Well the concepts are not really new....more than 30 years ago, the bell system controlled much of the local telephone companies in the USA and they claimed they had to use inflated long distance rates to subsidize the ability to provide universal local telephone service. Slowly alternative long distance carriers began to surface threatening AT&T's (the original one) monopolistic practices. Interstate ld rates of AT&T were regulated and the new comers were able to charge what they wanted.

The ultimate result was the break up of the bell system...one of the most reliable systems in the world was broken into composite parts....then AT&T (the surviving company) basically became a ld providers and its off shots such as well one example was what was then czlled NYNEX which consisted of the original bell owned units in NY State (New York Telephone) and New England (New England Telephone)....New Jersey, Pennsylvania and Maryland I believe were in separate system called Bell Atlantic....yada yada yada...slowly but surely, they begain doing guess what...re-uniting so NYNEX joined Bell Atlantic to become Verizon...which they got permission besides offering local service to offer long distance service to compete against...AT&T...well we don't have to go through the whole history other than to say it was the claim of the telcoms that to keep local rates low, long distance rates had to subsidize them.

Of course then cell phones came along...originally local areas and you roamed outside your local area in the USA with astoundingly high rates...also international roaming was pie in the sky...especially since the US carriers were slow to adopt gsm...slowly but surely the whole USA became one large non roaming area and all the rest again is history.

It is this model where there is no roaming within the USA, for the most part, that I believe Ms. Redding is trying to impose on the eu. Of course there is this constant battle, from my readings as I am really a disinterested party, between those who want the eu to become a super one bloc power with one foreign policy, one common currency, one mobile phone roaming rate whatever. Others want the eu to be a loose trade association. This is a battle that has apparently yet to be decided.....

But I agree. We're a long way away from trans continental international free roaming. The dual +1/+44 cards are a bit of a start, don't you think.

[bbob]

Originally Posted by petkow

Anyhow, international regulation of this type can only occur in something as bizarre as the EU. These things cannot really occur across the world!

Dont'forget in the 70 the usa splitt the telcom company because they became to dominant. When you look outside the eu you can find many countries that have rates far lower than in europe. Why is calling a eu mobile number still so expensive. I think it's good there is regulation.

I agree that companies had to pay big money to the goverments to get a 3g gsm license. Sure they have to earn this back. But what if these same govements would have given away these licences or at far lower prices. Do you really think rates would have been lower.
Please also note that many of these companies have made billions in loss to write off these purchases. The billions of loss can be compensated with future profits. So this way goverments are also paying for these losses.

[snidely]

So far no one has come up w. hard figures as to what, for example, Vodafone pays ATT or T-Mobile for each minute one of their customers is roaming on those U.S. systems. My guess is that it is pennies. After all, they each sell lots of minutes to MVNO companies that use their systems - and those MVNOs can make a profit by reselling those minutes for 10 cents or so.
The same for U.S. customers who go to the UK. My guess is that ATT and T-M pay less than 10 cents a minute to the various carriers since they, essentially, buying huge quantities of minutes. Since they charge 99 cents (ATT charges $1.29 for some customers) - that's an outrageous mark-up.

A long time ago I happened to see a price list from one overseas carrier as to what they actually paid various carriers in other countries. I can't recall any of the figures and by now it would be seriously outdated. Besides, I am sure I was under an NDA at the time. At that time, rates varied not only from country to country, but rates varied among diff. carriers within a country. I would guess that's still true.
What I can't understand is why a company like T-M doesn't encourage its own customers to roam on its own systems in other countries. The roaming cost is the same whether a customer roams on a T-M system or another system in a given country.

...mike

[inquisitor]

Originally Posted by snidely

What I can't understand is why a company like T-M doesn't encourage its own customers to roam on its own systems in other countries.

With German providers roaming rates varied depending on the actual network before, but nowadays they have flat tariffs for each country, too.
The reason maybe that most customers are incabale of performing a manual network selection and because a lot of modern SIM cards contain a value called "EFspn", which is the service provider name. Depending on additional parameters on the SIM card and on how your mobile phone handles that "EFspn"-value it will either show EFspn + network name simultaenously or it will permanently switch between both names or it will completely override the name of the serving network by the EFspn. You may have noticed e.g. that when using a United Mobile SIM, the display said "United Mobile", allthough there is no such network anywhere in the world.
EFspn is mostly used by MVNOs, who want their brand name to appear in the display instead of the serving network, but also by MNOs who don't want competitors' names to appear in their customers' displays while roaming (especially during national roaming, which may convey the impression of inferior coverage). So subscribers often can't actually see which network they're registered on and so any incentive of using a group-owned network would be senseless.