Sunday, September 14, 2008

iPhone, ATT, T-Mobile and how to avoid getting ripped off

My phones - ATT iPhone 3G, HTC T-Mobile Touch, Sony/Ericsson Walkman

I spent over half my time for the last few years outside of the U.S. doing Scrum training and experimenting with mobile phones. There are lots of options and some of them can cut your costs by 98% compared to U.S. vendors. That's right, you can make local calls for 2% of the cost of a U.S. roaming cellphone. ATT and T-Mobile cash registers make a loud k-ching sound when you travel abroad and you may not know it but they sometimes think Canada is as far away as Europe.

I couldn't resist getting the iPhone 3G to test out on my travels. The iPhone is a very cute and very expensive toy. I love it. Too bad I can't use it as I travel around the world. I spent a week in Canada last month and got charged $100 extra on top of my $100 monthly charge for using Gmail and Google maps. Pretty expensive map.

ATT claims an award for "the best wireless network in the world." They must be drinking their own Koolaid. At Logan aiport in Boston the signal on the iPhone is so weak my wife can't hear me so I have to pull out my HTC T-Mobile phone which works fine. Same thing happened to me in Toronto. Also, my HTC T-Mobile has all the services of the ATT iPhone for $25.27 a month added to my wife's Blackberry bill as a second line. This includes no extra charge for international roaming data services.

So for the price of spending a week in Canada with my iPhone, I could have eight T-Mobile phones added to my wife's account. I'm keeping my T-Mobile phone so I don't have to use my iPhone, particularly when traveling abroad which is about 2/3 of my time. Also, I have the TOM TOM GPS system on the HTC. I need a real GPS, not a fake GPS like the iPhone for many things although I really like Google maps on the iPhone.

Now let's look at call charges. I'm in Denmark right now where phone charges are cheaper than most countries. Here is what a local call costs me:

ATT iPhone - $1.29/minute
T-Mobile - $0.99/minute
Lebara Mobile - 9 ore = $0.017/minute

Always get a local SIM for your phone. Buy a European phone if you need to. Otherwise you will be spending 100 times more for local calls. I might hack my iPhone to swap SIMS but I can already swap them in my T-Mobile phone so it is probably not worth it.

A markup of 10000% is a little steep so maybe ATT could qualify as the biggest ripoff of cellular networks in the world, although other U.S. vendors are not far behind.

But maybe they should be compared to major European vendors like Telenor, Orange, or Vodaphone and for their SIMs (I have several of them) I will get charged 20-30 cents a minute so maybe the ATT markup is only 500-600%. The iPhone is so cute it might be worth it as long as you don't travel more than a week a year.


Blogger Burmeister-Teltow said...

I tried to get a local SIM in the states on my last visit, but that is hard for a visitor from europe.

I choosed cingular, bought a sim, works fine. But i am not able to charge it, because cingular/ATT is unable to check an european VISA card. Hmm, any car rental can do.

6:17 AM  
Blogger Arne Evertsson said...

European operators are just as bad. As soon as I leave one EU country for another I pay a thousand times more for data, and perhaps ten times more for voice. The strange thing is that it doesn't matter that you're on the SAME network abroad.

Let's assume the market is actually working. It must then mean that there isn't enough of a demand for fair pricing outside one's own home country. Well, I don't know...

8:02 AM  
Blogger Jeff Sutherland said...

Tom Poppendieck pointed out the the cellular phone business is clearly not a mature market. Pricing is not consistent. Restraint of trade is dominant.

I just returned from a month in Europe and only used the iPhone for occasional peaks at Gmail. $200 for that at $20 per megabyte. Vodaphone charge me about 0.05 per megabyte if I go over my limit. I also have an ATT USB modem which has unlimited use in Europe and worked pretty well. It is the iPhone that is the ripoff. Maybe I should just hack the phone and be done with ATT on that device.

5:34 AM  
Blogger John Gordon said...

To be clear, it's not the iPhone hardware/software that's the problem, it's that the iPhone won't work with a non-AT&T SIM.

So the precise source of the problem is that AT&T and Apple have an exclusive agreement backed up by an locked phone.

If Apple were to sell unlocked iPhones, or if users were able to unlike iPhones when their contracts were completed or by paying an extra fee, the iPhone would work very well overseas.

9:49 AM  
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