Analyst Angle: A glance at international roaming trends

Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
As U.S. mobile operators search for new revenue streams, attention is turning to consumers’ increasing usage of services while roaming internationally. AT&T offers international voice roaming in the most countries, thereby giving the carrier a slight lead overall compared to other U.S. tier-one carriers. However, on the data side, Verizon Wireless has been steadily increasing its reach overseas and is neck and neck with AT&T in terms of international destinations with data roaming. This ferocious competition has brought similar approaches and has affected international roaming trends.
Two voice roaming options
Currently, AT&T, Sprint, and Verizon Wireless customers have two options when traveling outside of the U.S. – a standard per minute rate and a discounted option that requires a monthly fee. These monthly discount options provide an average discount of 24 cents per minute with AT&T, 36 cents per minute with Sprint, and 41 cents per minute with Verizon Wireless. The latest carrier to go the monthly discounted route was Sprint with the launch of the $4.99/month Worldwide plan in October 2009. As of now, the only carrier lacking a discounted voice roaming option is T-Mobile. The company instead offers a standard per-minute price option.
International voice roaming coverage ranges from 199 countries with T-Mobile to 223 countries with AT&T.
Data roaming services – prices still hefty
For many Americans traveling outside the U.S., it has become a necessity to be connected at all times, especially for those working for global companies who depend on their devices to continue their office work. This can also be true for many customers who feel they cannot live without their electronic gadget while overseas. The price to access the data service is lofty, and in some cases it does not come with unlimited use, but rather in buckets of data.
For an easier comparison between carriers, Current Analysis will focus on the options that offer the most coverage internationally, such as the GlobalEmail solution with a Global Phone from Verizon Wireless and the Worldwide Data plan with an International Phone from Sprint. Verizon Wireless offers its GlobalEmail plan for $65 per month with a qualifying voice plan. Sprint customers can opt for the Data Worldwide/Blackberry Worldwide plan for $40 per month with the Simply Everything or Everything Data plan, or for $70 per month without. AT&T provides a tier of data access that ranges in price from $25 per month for 20 megabytes to $200 per month for 200 MB, while T-Mobile’s only offer is its Unlimited International E-mail add-on for $20 per month for use only with Blackberry devices.
It is not clear if other carriers are going to follow AT&T’s tiered data approach and eliminate their unlimited international data plans in the near future. Alternatively, these carriers could expand their data offerings to a lower-priced, entry-level limited-data plan in order to entice those customers who don’t want or require an unlimited option.
Dedicated plans for Canada and Mexico
Given the high traffic of travelers to Canada and Mexico, both AT&T and Verizon Wireless offer a specific voice plan for these countries. These plans are available for individual and family users. The individual plan to Mexico ranges from $55 per month with 450 anytime minutes to $215 per month with 6,000 anytime minutes. The family options start at $85 per month with 700 anytime minutes, up to $315 per month with 6,000 anytime minutes. The Canadian version is similar to the Mexican version, except that it is priced $5 per month more.
As an alternative for travelers, AT&T and Sprint have a devoted add-on for Canada. AT&T’s option is priced at $5 per month and offers a discounted per-minute voice rate of 59 cents, while Sprint’s option is priced at $3 per month and offers a 20 cent per minute rate; without this add-on the price per minute while in Canada is 59 cents. In addition, AT&T also offers an add-on for tourists in Mexico. Priced at $5 per month, this feature lets customers make and receive calls for 59 cents per minute.
While it is true that T-Mobile does not have a dedicated plan or add-on to Canada or Mexico, it offers a competitive per minute rate for these countries. The price to make calls in Canada is 49 cents per minute, while the price in Mexico is $1.49 per minute.
Rental option is gone
In the past, users were able to rent international-capable phones for travel outside of the U.S.; however, this has recently changed. AT&T, T-Mobile, Sprint and Verizon Wireless have transitioned from third-party phone solutions to offer in-house options. Further, the use of one handset when traveling overseas is not only convenient, but also helps in avoiding the hassle of switching devices and even transferring information between handsets for some customers. This is largely supported with a broad international-capable handset selection for GSM carriers AT&T and T-Mobile, as well as a humble phone selection for the CDMA carriers Verizon Wireless (less than ten) and Sprint (less than five).
Currently, AT&T has the lead in terms of variety of international phone selection with 39 devices. In second place is T-Mobile with 31 handsets, while Sprint and Verizon Wireless have a modest phone selection with nine and four devices, respectively. Therefore, Sprint and Verizon Wireless should continue introducing international capable handsets so customers do not have to think twice when going overseas.
International Wi-Fi access
While T-Mobile was the first to allow customers with UMA-capable devices to make free calls when using a Wi-Fi connection, this service has been discontinued for new customers, although existing customers were grandfathered in and can still do so. However, the Wi-Fi idea was planted and access to it by international travelers has been increasing. The addition of the Skype application to a select number of Verizon Wireless devices marks the beginning of possible new applications that can be used to communicate at a lower price, but Verizon Wireless does not support this internationally. Therefore, users will have to find a Wi-Fi connection in order to make calls through Skype.
Expanding cruise ship access
All U.S. carriers have been expanding their cruise ship coverage. During the first half of this year, the number of cruise ships covered has increased, especially for T-Mobile which has more than tripled its coverage to offer service on a total of 312 cruise ships. Second inline comes Sprint with 185, then AT&T with 140 and finally Verizon Wireless with 121 cruise ships. The voice roaming rates on cruise ships has remained steady for all carriers at $2.49 per minute, except for T-Mobile which charges $5 per minute.
Lastly, carriers should put more emphasis on marketing their brand, especially now that the summer is finally here and many Americans are planning to take their family vacation outside the country. The carriers should take this opportunity to remind their customers about the benefits of taking their devices with them (or maybe upgrading to a new one) and including them as a necessary part of their vacation checklist.