Great Roaming Rip-off takes another hit as U.K.’s Three axes premiums for U.S. trips

In a thoroughly consumer-friendly move that challenges its rivals, the British mobile operator Three has effectively eliminated all its roaming premiums for customers traveling to the United States.

Three has form in this arena. At the start of 2007 it introduced a scheme called “3 Like Home”, which allowed customers to use their existing domestic voice and data allowances in other countries where parent company Hutchison Whampoa has carriers, such as Australia and Italy. The deal was scrapped two years later because there just wasn’t enough coverage, but reintroduced in August this year under the name “Feel at Home”.

Feel at Home initially included only seven countries (Republic of Ireland, Australia, Italy, Austria, Hong Kong, Sweden and Denmark) outside the UK, but on Wednesday Three added 4 more: Indonesia, Sri Lanka, Macau and the all-important U.S.

How did they do it?

The addition of the U.S. is a big deal for two reasons: its popularity as a holiday and business destination; and the fact that, unlike in the other 10 “Feel at Home” countries, Hutch doesn’t have its own network there. Instead, Three customers will automatically roam onto the networks of AT&T(s t) and T-Mobile USA(s tmus), which like most of the world use the GSM network standard.

“We have a really good commercial team,” a Three spokeswoman told me by way of explanation, noting that devices will only be able to connect to AT&T or T-Mobile USA. “There’s no reason why other operators can’t do it either.”

That’s absolutely correct. The international roaming market is scandalously opaque and customers are getting ripped off at every turn — which is why so many new, roaming-centric virtual network operators are making overtures to fed-up customers. It costs pennies (if that) to provide a megabyte of data usage to a roaming customer, yet the retail price can be many multiples higher – AT&T customers, for example, will pay around $20 per megabyte if they travel outside North America without buying a bundle beforehand.

The markups are all determined in secret, and the larger operators have traditionally been loath to allow prices to fall to reasonable rates. Which is why it’s so surprising to see AT&T in particular give the relatively scrappy Three (with 8 million customers to AT&T’s 109 million) a low enough wholesale rate to make “Feel at Home” viable for travellers to the U.S.

T-Mobile USA also recently introduced free voice and data roaming in 100 countries, although it limits surfing speeds drastically. I’ve asked Three whether it intends to offer full-speed roaming at no premium, and will update this story when I get an answer.

Seeing as there’s no international regulator to extend Europe’s internal elimination of roaming premiums, let’s hope against hope that we’re seeing the start of a competition-driven shift in the same direction.

4G plans

Three also took the opportunity to put some more flesh on its 4G rollout plans. The firm said it started connecting customers with a 4G-capable device to the new network, and all customers with suitable devices will get the speed boost by the end of the first quarter of 2014.

Three said it will have coverage across 50 UK cities by the end of 2014, and “98% of the population by the end of 2015.”

The company is very data-centric, and has quite a few all-you-can-eat deals — despite being the smallest of the UK’s big 4 operators, it carries 41.5 percent of the country’s mobile data, according to Enders Analysis data from June.