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Overseas Talk Isn't Cheap


BusinessWeek Lifestyle: Personal Tech

Overseas Talk Isn't Cheap

World travelers face a tangle of cellular plans and fees

On a business trip to England, France, and the Netherlands, Wendi Norris and her colleague, Dave Donohue, wanted the convenience of a cell phone. So Norris, vice-president for marketing at Scale Eight, a San Francisco data-storage company, took her $600 Nokia 8890 (NOK) with AT&T Wireless service (AWE), which charged a roaming and long-distance fee of $1.34 a minute to her U.S. account. Donohue, director of public relations, used a Motorola Timeport (MOT) on free loan from his hotel. He paid only 15 cents a minute--until he left England, when roaming charges spiked to $5 a minute.

Who got the best deal? They're still figuring it out. Using one cell phone to make calls from different locales abroad involves a complex tangle of long-distance fees, roaming charges, and shifting exchange rates. To add to the confusion, few U.S. phones work with overseas networks, and still fewer U.S. and European phones work in Japan.SHOP AROUND. To sort through this, first see if your wireless carrier offers overseas service. This way, you can use one phone number here and abroad, and all charges are on one bill. But shop around. Lower costs at another carrier may offset the inconvenience of having two phone numbers and two bills.

You'll also have to see if your existing phone will work on the GSM (global system for mobile communication) standard used in most parts of Europe, Africa, and Asia, except Japan. Otherwise, you'll have to buy or rent another handset.

Some carriers are travel-friendly. Nextel (NXTL) and VoiceStream Wireless (VSTR) don't require a separate agreement to activate their GSM phones overseas. Nextel's rates, including roaming fees, vary from 99 cents a minute for calls made in Vienna to $5.99 a minute for Moscow. VoiceStream's pricing is harder to pin down. Rates may vary daily according to currency rates and prices charged by foreign carriers. Its Web site can help you find current costs (table).

Other carriers, such as AT&T (T) and Sprint PCS (PCS), transfer your domestic phone's number and identity via a SIM card that slides into a GSM phone you buy or rent. You'll have to sign up for overseas service, but all charges go on one bill. AT&T Wireless' WorldConnect service costs a one-time $25 for the SIM card and $7.99 a month above a domestic plan. Sprint's has a $60 SIM charge and $5.99-a-month service fee. GSM phones cost from $299 to $700, or can be rented by the week, month, or year.

Of course, you don't have to go with a U.S. carrier. You can rent a phone at the place you're visiting. In England, $6.95 a day could get you a GSM handset from Rent-a-Phone, one of many companies that offer such services. But be aware that Rent-a-Phone charges calls "per unit"--at about 25 cents per unit--and that a unit may be less than a minute, depending on the country you're in. For instance, a call to the U.S. from Russia costs 72 units--or $18 per minute.

If cost is no object, you can buy a satellite phone from Vodafone's Globalstar, which works in many worldwide locations--even from 200 miles out at sea. You may want this option if you frequently travel to Japan as well as Europe. Otherwise, you'll need yet another phone and service plan to call from Japan. You pay dearly for Globalstar's convenience. Its least expensive phone lists for $1,200 (though one is available for $699 as a promotion). Roaming and long-distance fees are charged on top of the base contract, which prices minutes up to $1.69 each.

There are ways to save. In London, Norris and Donohue could have bought a phone and a 20-minute prepaid calling card for as little as $50. Or they could have bought just the prepaid card and used it with the hotel loaner. Incoming calls are charged to the caller, and local outgoing calls can go as low as 15 cents a minute. Some cards charge just 25 cents for calls to the U.S. By searching out options, it's possible to find a good, even great, deal.By Roy FurchgottReturn to top


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