The GSM overseas wireless market heats up for US customers

AT&T, Verizon Wireless, and Sprint Nextel, look out! European companies with unfamiliar names to many Americans, now offer much cheaper and more convenient GSM cellular services to US residents traveling abroad.

NEW YORK CITY (BetaNews) - As AT&T, Verizon Wireless, and other major US wireless carriers move further into GSM, they're encountering some real competition from small start-ups such as Call in Europe, which offer US residents who are traveling in Europe a much better deal on cell phones that will work overseas.

At an event last night in New York City, French-based Call in Europe officially launched a new pricing model which eliminates any subscription or membership fees.

Instead, Call in Europe's US customers now pay only a one-time fee of $29 for a SIM card -- which can be popped inside a GSM-capable cell phone for use in Europe -- plus per minute charges for calling time.

Moreover, these per-minute charges are much more reasonable than those being charged by the big US carriers, contended Patrick Gentemann, Call in Europe's president, in an interview with BetaNews during a press conference at the event.

"I'd say that Call in Europe offers a very good deal," concurred Ross Rubin, NPD's Director of Industry Analysis, who attended yesterday's show along with BetaNews.

Indeed, as summed up in a comparison chart on Call in Europe's Web site, Call in Europe's rates for US travelers calling either within Europe to back home to the US are a lot cheaper than those of either AT&T, Verizon Wireless, or T-Mobile -- and also than those of some other start-ups specializing in providing cell phones for US travelers overseas.

Call in Europe charges only 39 cents per minute for calls placed within Europe, whether the call is made to somebody in France, another European country, or somewhere else in Europe. By contrast, AT&T and Verizon Wireless (co-owned, ironically, by UK-based Vodafone) each charge $1.29 per minute for calls from within Europe to any of those three places.

T-Mobile USA, the American offshoot of Deutsche Telecom, charges 99 cents per minute for calls placed within France, $1.33 per minute for calls placed within European countries, and 99 cents per minute for calls from Europe to the US and Canada.

Cellhire, another recent start-up alternative, charges 99 cents per minute for calls placed within France, $1.75 per minute for calls within European countries, and $1.45 per minute for calls from Europe to the US and Canada.

Also unlike some of the big US wireless carriers, Call in Europe does not require a lengthy service contract.

Gentemann acknowledged that Call in Europe actually moved to its new pricing model a couple of months ago, after finding that its previous policy of charging subscription fees did not go over that well.

"We listened to people," he told BetaNews. "A lot of people who travel in Europe don't do so that frequently. They only want to pay for the phone during the times when they are overseas."

Call in Europe also rents cell phones that can be used in conjunction with the SIM cards.

GSM cell phones for use with SIM cards can also be rented or purchased from many other companies on the Web. To be used in Europe, the phones must support 1800/900 MHz GSM frequency ranges, as opposed to the 1900 MHz and 850 MHz bands for GSM that work in some parts of the US.

Many dual, tri- or quad-band phones will support both US and European and US GSM frequency ranges.

Some rentable GSM phones are "locked" -- meaning that they can only be used with a specific service provider -- whereas others are "unlocked."

Many other competing start-ups also sell or rent SIM cards, as do local wireless providers in Europe.

However, US residents who decide to take a trip to Europe are often lack knowledge in advance of specific providers in the areas they'll be visiting -- and this information can be tough to obtain by searching the Web, especially given the language barriers.

Also, in comparison to many of its Web-based competitors, Call in Europe seems to doing an excellent job of marketing itself to US residents who are likely to benefit from its services. For instance, just following last night's press conference at a club in Manhattan, Call in Europe announced its services and new pricing model to potential customers at a VIP reception.

Call in Europe gave its reception on a "French Tuesday," a weekly social event for current residents of the New York metropolitan area who originally hail from France.

Cellular Abroad, another start-up with considerable marketing savvy, recently signed a deal with National Geographic for a "Talk Abroad Travel Phones."

NPD's Rubin suggested that, with US wireless carriers such as AT&T and VZW now stepping more deeply into GSM and next generation wireless services, competition for the market of US travelers abroad could intensify.

For its part, Sprint started offering services in the GSM arena a few months ago, following its acquisition of Nextel.

"Things could get very interesting," NPD's Rubin told BetaNews.

Moreover, big US wireless carriers such as AT&T, Verizon Wireless, and Sprint Nextel don't own their own network facilities in Europe. Instead, they lease facilities from European wireless networks, just like the smaller specialist start-ups. So the US wireless carriers really can't make any greater assurances as to reliability.

Gentemann said that, over the next couple of months, Call in Europe plans to extend its services to residents of the UK, Germany, Italy, and Spain.

He also emphasized, though, that Call in Europe has no intentions of starting to provide cell phones to US or Europeans residents traveling to the Asia-Pacific, a part of the world that uses wireless protocols different from those commonplace throughout Europe.