As wireless carriers begin exploring data roaming, several are not simply limiting their sights to domestic roaming but are seeking to provide a more seamless mobile data experience around the world.
Cingular Wireless L.L.C. introduced international data roaming not long after it launched its UMTS/HSDPA high-speed data network, and Sprint Nextel Corp. recently followed suit with data roaming deals covering Mexico and Canada. Having foreign parent companies has allowed both T-Mobile USA Inc. and Verizon Wireless a road into international data as well.
According to the U.S. Bureau of Transportation Statistics, Canada and Mexico are the countries U.S. residents most often visit. In 1999 (the last year comprehensive statistics were available), there were about 300 million visits between the United States and Canada and the United States and Mexico; about 7 percent of those were primarily for business reasons, BTS reported.
However, international travel has generally been booming over the past 15 years or so, increasing about 70 percent between 1990 and 2000 alone, according to BTS. By 2000, 27 million U.S. residents traveled overseas while 26 million people visited the United States from abroad.
Ovum analyst Roger Entner said that while roaming capabilities in Canada and Mexico are “fairly important” because of frequent travel, he pointed out that overseas data roaming “is more for bragging rights” and to satisfy affluent customers who are more likely to travel abroad.
“It’s more often one of those things if you have it, your customers don’t get upset, rather than that you make much money,” Entner said.
Analysts agreed that GSM-based carriers have a leg up when it comes to providing international data roaming because of the near-ubiquity of GSM service. Cingular boasts of more than two dozen countries where its customers can use data services, and an additional 45 countries where UMTS service is available that could eventually be added to its list. T-Mobile USA says its customers can have data access in more than 100 countries so long as their devices are up to snuff.
Verizon Wireless has gotten around the limitations of worldwide CDMA coverage by offering a dual-mode CDMA/GSM handset and PC card in partnership with parent company Vodafone Group plc. Sprint Nextel augmented its CDMA voice roaming agreements to support data with Mexican carrier Iusacell and with Bell Canada north of the U.S. border. So long as customers have a data services subscription from Sprint Nextel, they can roam in those two countries.
But these plans aren’t cheap, reflecting their target audience of international business travelers. Sprint Nextel offers an unlimited North America data plan for $130 per month with a one-year customer agreement or a promotional plan price of $100 per month with a voice plan and a two-year contract. Plans from Cingular and Verizon Wireless fall into a similar price range.
Entner notes that even when a customer has a service plan, data usage often still is metered while abroad. Verizon Wireless’ $130 per month international plan, for example, offers access in many countries, but in some customers must pay an extra 3 cents per kilobit for data sent and received.
“You have to be really vigilant, otherwise sticker shock will kill you,” Entner said.
Jonathan Schildkraut, senior vice president of equity research for telecom and data services at Jeffries & Co., commented that while the current importance of the international data market is unclear, it is also “a market of growing importance.”
While the market so far is primarily focused on business customers, Schildkraut noted, rapidly advancing networks and the use of Voice over Internet Protocol for voice traffic will make international data roaming much more important for carriers.
“It becomes extremely important, beyond the business user, to have the network in place even for the casual traveler, because voice is data at that point,” Schildkraut noted.
