Is 2015 the Year for Reasonably Priced International Data Roaming?

I went to dinner with a friend of mine a couple of months ago. He was visiting Prague from Israel and carrying two phones with him so he could use both Czech and Israeli SIM cards. The reason? He "couldn't afford to pay the international data roaming charges."

My friend is well-off, and he isn't averse to spending money when this will provide comfort, convenience or enjoyment. He took his son to the Wimbledon final last year, for example, which is pretty darn expensive if you didn't win the public ballot. If he'd rather carry two phones than pay for international roaming, that's saying something.

For me this evokes a long-standing pet peeve: the treatment of electronic devices on planes. I gave up paper years ago, and until very recently I was forced to read boilerplate lifestyle articles in the inflight magazine for 20 minutes during take-off and landing because their absurd rules forbade me from reading on my Kindle or iPad. There just weren't enough people bothered by this to compel the air travel authorities to take action... until there were. In the last couple of years, reading on devices has catapulted into the mainstream. Once this happened, it didn't take long for the pointless ban to go.

In a similar way, using data on your smartphone was a narrow niche until the advent on the iPhone. Since then, more and more people have had to deal with meager bandwidth allowances that barely suffice to read email whenever traveling abroad. Now even mobile broadband is becoming virtually indispensable. If I want to use Google Maps for navigation, which is kind of handy when in an unfamiliar city, I'm going to consume a lot of megabytes quickly. Streaming music and video are also becoming staples of the digital diet. I was struck by a recent post by uber-VC/blogger Fred Wilson about the key trends of the past year:

we finally got rid of files. dropbox, google drive, soundcloud, spotify, netflix, hbogo, youtube, wattpad, kindle, and a host of other cloud based services finally killed off three letter filenames like mp3, mov, doc and xls. spending a week in the caribbean with young adults and bad internet was the tell on this one for me. they don’t even have mp3s on their iphones anymore!

Of course there is no real technical justification for roaming data charges that are many multiples of domestic prices. It doesn't cost more to schlep bits from the cell tower to your phone just because the natives are speaking a language you can't understand and eating food you can't recognize. The mobile operators are exploiting standard market segmentation techniques: getting Internet access abroad is a luxury so it commands premium prices.

Correction: it was a luxury. As Fred points out, our modern lifestyles now rely on constant connectivity at broadband speeds. Data roaming may always be a bit more expensive when abroad, but prices are poised to plummet. We are already seeing hints of this with T-Mobile's unlimited international data, albeit with inadequate transfer speeds for many applications. There is also EU regulation in the works to harmonize rates across the Union, although implementation is (shockingly) taking longer than expected.

Mobile operators need to react to the shift in consumer expectations or they risk being disrupted out of the international data game entirely. Apple recently announced a new SIM card for iPad that can switch between providers under software control. Users like my friend will thus get the advantage of multiple phones when traveling without the bulging pockets. This technology is bound to become more widespread unless operators inject some sanity into their international pricing plans.

Airlines dropped their "turn off your electronic devices" nonsense like a live grenade as soon as it became a real nuisance to a critical mass of travelers. Expect the same to happen with international data roaming charges, with the first real steps taken this year.

Matt

Matt