Cheapest option for using your phone abroad

In an unprecedented move, T-Mobile has introduced the cheapest way to use your cellphone overseas.

It wasn’t long ago that T-Mobile did away with contracts. Now the next phase of their “Un-Carrier” plan has been announced: Unlimited data and free texting when you travel abroad, plus 20 cents a minute even back to the United States.

This announcement remedies a real problem in the wireless industry. Since the first iPhone was introduced, consumers have been going overseas and coming back home to exorbitant cell phone bills. The worst call I got about it was someone who went to Costa Rica and got a $30,000 bill for 3 days. Another person got a $6,000 bill for 40 minutes of use in a Canadian airport during a plane change.

It was just part of how the wireless world worked: When you went overseas, you got cheated.

But that’s no longer the case thanks to T-Mobile’s move. Believe me, this is a sea change in the cellular business. It’s as big as back in 1996 when AT&T eliminated roaming charges. That move was considered revolutionary in its day. So too is T-Mobile’s move today.

The T-Mobile deal is for those on the Simple Choice plan. So you’ll be able to use your phone in over 100 countries overseas (excluding Paraguay) and not worry about bill shock when you get back home. It’s the cheapest option for using your phone abroad.

There will, however, be some limits for frequent travelers. Any trip abroad needs to be six weeks or less, and customers need to spend at least half their time in the U.S. in any three-month period. So the program would not be for students spending a year abroad, for instance.

Meanwhile, a poster on my messageboards named FlyGuy pointed out that it may be prohibitively expensive to migrate into this plan. “Anyone thinking about switching from a Classic plan to a new Simple Choice plan will be slapped with a migration fee of anywhere between $50-$200!” he noted. “It’s not obvious to the subscriber when they go to change plans online, and in my case wasn’t even mentioned when I made the change by phone with a representative. A few weeks later I saw $300 charge on my bill.”

Why is T-Mobile making this offer at this time? To get some mojo going in the marketplace. They have no corporate business, and they were last to get the iPhone. They were just a tarnished brand. But now they’re pitching this as a feature to corporate types and small business people. Of course, T-Mobile had to wait until their new LTE network was up and running around the United States before the rollout of this announcement.

If you’re thinking about making the switch to T-Mobile, their no-contract plans are $50, $60, and $70 depending on how much data you want.

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