T-Mobile is unhappy with the how much AT&T is charging it for roaming data and is asking the Federal Communications Commission to intervene. In 2011 the commission ordered operators to provide data roaming to competitors at "commercially reasonable" rates. T-Mobile claims the rates it pays for data roaming aren't reasonable and has filed a petition with the FCC asking the commission to define what constitutes commercially reasonable data roaming rates. What's interesting to me about T-Mobile's FCC filing is that it offers a peek into the normally secret world of wholesale data pricing between mobile operators and MVNOs.
The crux of T-Mobile's argument is that AT&T is charging data roaming rates that are higher than what AT&T charges its own customers for data and also higher than what T-Mobile charges its MVNOs and non-US operators for data.
The numbers below come from a section of the filing labeled EXHIBIT 2, Declaration of Joseph Farrell, D.Phil. In Support of Petition for Expedited Declaratory Ruling of T-Mobile USA, Inc. Joseph Farrell is a UC Berkeley economics professor and a former Chief Economist at the FCC who was hired by T-Mobile to analyze data roaming prices. The exhibit starts at page 42 of the main document and has its own independent page numbers which are what I refer to as page numbers below.
AT&T customers who use 1,700 MB/month pay a maximum of 5¢/MB (or 8.2¢/MB on Verizon, 2.9¢/MB on Sprint and 4.1¢/MB on T-Mobile). (p.24 table 2)
In 2014 T-Mobile charged non-US operators an average roaming rate of 20.4¢/MB (p. 27 table 3)
The price T-Mobile paid non-US operators for data when its customers roamed abroad averaged 7.8¢/MB in 2014. (p. 29 Table 5)
In 2013, T-Mobile paid an average 30¢/MB for roaming data in the US. (p31. table 6 and image above)
The most interesting statistic of all for prepaid MVNO followers like me is that in 2013 T-Mobile charged its MVNOS less than one tenth what it paid for domestic roaming data. That means that the average price T-Mobile MVNOs paid for data in 2013 was less than 3¢/MB ($30.72/GB).
The wholesale data rates that T-Mobile is paying for domestic data roaming seem to be dropping rapidly; from 85.9¢/MB in 2012, to 30¢/MB in 2013 to 18.1¢/MB in 2014 (p31. table 6). If the wholesale price of MVNO data is falling as fast as the cost of roaming data that would mean T-Mobile MVNO's are paying less than 1.84¢/MB or 18.84/GB for data currently.
I was surprised at how high wholesale data rates actually are. That MVNO's are paying an average of $30 or even $18 per GB means that the margins that MVNOs operate on are incredibly thin. It also makes it clear why no MVNO can afford to offer a truly unlimited, unthrottled data plan.