Free International Roaming: Will It Disrupt Carrier, TEM Market?

Will T-Mobile’s (TMUS) move to unleash international data and voice roaming disrupt mobile device management and mobile carrier market shares among business customers? We caught up with someone on the front lines of that discussion, Dan Rudich, Tangoe’s (TNGO) senior VP of rTEM (real-time telecom expense management), to find out. Tangoe offers MDM (mobile device management), TEM and mobile lifecycle management services to a range of companies. Here’s what Rudich had to say.

First, the changes to international roaming are good for the industry, Rudich told me.

“People have gotten burnt so much that they turn their radios off when the travel and they are less productive,” he said, referring to the astronomically high mobile bills that can come from using data or voice services when traveling internationally.

Rudich noted that T-Mobile’s executives pointed out that carriers are making something like 90 percent profit margins on international roaming, and T-Mobile’s move to make international data roaming free and voice call roaming available for a flat, per-minute fee provides visibility that wasn’t previously available.

However, the downside is that T-Mobile is in a distant 4th place in the carrier market, according to Rudich.

Tangoe manages about $26 billion in telecom spend globally for its customers. From his vantage point, AT&T (T) and Verizon (VZ) are neck-in-neck leaders, Sprint (S) is a distant third and T-Mobile a distant fourth.

“We’ve already recommended T-Mobile to some of our customers that are heavy international travelers,’ Rudich said. But  not many customers are switching. International travelers make up a minority of business smartphone users. Also, enterprise contracts with wireless carriers tend to last three years making churn a slow process.  

“I’m sure T-Mobile will pick up people who are coming to the end of their contract,” Rudich said.

He also advised organizations to look at T-Mobile’s fine print. After a certain amount of data, bandwidth is reduced for the rest of the billing cycle, and additional fees are required to increase bandwidth again.

Still, Rudich said T-Mobile is shining the light on some hidden industry practices, which is a good thing.