Mobile data costs have dropped by roughly 95% over the past decade. In 2015, 1GB of data cost an average of $8.53 globally. In 2024, the average is under $0.50 per GB in most developed markets. The cost of delivering a megabyte of data across a cellular network has fallen to near-zero.
International roaming rates haven't followed that curve. Most US carriers charge $10 per day for their international "add-on" plans. Without an add-on, roaming charges can run $0.005–$0.015 per kilobyte — which works out to $5–$15 per megabyte. That's 100x to 1,000x the domestic wholesale rate for the same data.
The gap between production cost and consumer price in roaming is not explained by technology. It's explained by incentives and market structure.
How Roaming Pricing Actually Works
When your phone connects to a foreign network, two carriers are involved: your home carrier (who you pay) and the visited network (who provides the local infrastructure). The two carriers have a bilateral roaming agreement that specifies what the visited network charges the home carrier for each megabyte of data delivered.
These wholesale inter-carrier rates — called IOT (Inter-Operator Tariff) rates — are negotiated in bilateral agreements between carriers. The GSMA maintains a "Transferred Account Procedure" (TAP) standard that governs how roaming usage is recorded and exchanged between carriers for billing purposes.
The actual wholesale IOT rates for data have declined dramatically. The GSMA reported that average inter-operator data rates fell from around $0.15/MB in 2017 to under $0.02/MB in 2022 across most major carrier agreements. At $0.02/MB, a 10GB roaming data session costs the home carrier $200 in inter-carrier fees — manageable but not trivial.
The $10/day consumer add-on price for international plans sold by major US carriers is priced against an assumption of 2–5GB daily usage, implying a consumer revenue of $2–$5 per GB, versus an inter-carrier cost of $0.02 per GB. The markup is roughly 100–250x at current wholesale rates.
Why Carriers Don't Compete Away the Margin
Standard economic theory would predict that if one carrier charges $10/day for roaming and another offers the same service for $2/day, customers will switch to the cheaper carrier. This has happened to some degree — T-Mobile's "Magenta" plans with included international data have gained market share in the US partly on roaming pricing. But the overall level of consumer roaming charges has remained high.
Several structural factors explain why competitive pressure hasn't eliminated the margin:
Infrequent travelers don't switch carriers for roaming: A consumer who travels internationally once a year treats roaming as a rare event, not a decision factor when choosing a primary carrier plan. The $10/day add-on is an annoyance, not a deal-breaker. Without significant customer churn specifically attributable to roaming prices, there's limited competitive pressure to reduce them.
Business travelers are often on corporate accounts: Many frequent business travelers are on company-sponsored corporate plans. The employee doesn't see the bill directly — the company's finance team does, and they're often too busy to optimize for it. This creates a delay between high roaming costs and the competitive signal that would force carrier pricing changes.
Switching costs are high: Changing your primary phone number and carrier plan is a significant friction event. Even dissatisfied customers often delay the switch for months or years. This reduces the urgency for incumbent carriers to compete on roaming pricing.
International plan add-ons are profitable anchors: The $10/day add-on is presented as a convenient, all-inclusive option. Many travelers pay for it reflexively rather than researching alternatives. The marketing framing ("worry-free international") successfully converts price sensitivity into convenience purchasing.
The EU Experiment: What Regulation Achieved
The European Union provides the clearest case study in what happens to roaming prices when the structural incentives are disrupted. The EU Roam Like Home regulation, which came into full effect in 2017, prohibited EU carriers from charging extra for roaming within the EU/EEA. A French consumer uses their domestic plan in Germany, Spain, Italy, and all other EU/EEA countries at no additional cost.
The regulation worked. Within-EU roaming charges are functionally zero for consumers. Mobile data usage by travelers within the EU has increased significantly — BEREC (the EU's telecom regulator) reported a 28x increase in mobile data consumed while roaming within the EU between 2016 and 2023.
The model hasn't been replicated globally. Outside the EU/EEA, and for EU residents traveling outside Europe, roaming charges remain largely market-determined — which means largely at the incumbents' discretion.
Why MVNO and eSIM Providers Fill the Gap
Travel eSIM providers like Truely operate by negotiating directly with local carriers in each destination country at rates close to the IOT wholesale floor. The carrier charges Truely something close to the $0.02/MB wholesale rate. Truely sells to consumers at $4.99–$19.99 per day depending on the plan. The margin is significant but the consumer price is still 50–80% below what the consumer's home carrier would charge for equivalent data through an add-on plan.
This is possible because Truely routes around the home carrier entirely. Your home carrier is not involved in the data transaction when you're using a Truely eSIM. The billing relationship is directly between Truely and the local carrier, at wholesale rates that haven't been inflated by the consumer retail markup layer that home carriers apply.
The model is not new — prepaid local SIMs have worked on the same principle for years. What eSIM adds is convenience: you establish the billing relationship and install the plan before you travel, rather than at an airport kiosk after a long flight.
When Your Carrier's Plan Is Actually Better
The honest answer is that for very short trips — a weekend trip to Toronto from New York, for example — your home carrier's $10/day add-on may be less friction than researching and purchasing a travel eSIM. The convenience premium is real for infrequent, short-duration trips.
The math shifts decisively for trips longer than three days, trips to multiple countries, or trips where data usage will be high (remote work, navigation, video calls). At a Truely weekly plan of $9.99 for unlimited data versus $70 for seven days of a typical carrier add-on, the difference is $60 per trip. For a business traveler making 20 international trips per year, that's $1,200 annually — before accounting for the months when the carrier's add-on plan is the only option and Truely isn't yet covering that destination.
What Carriers Could Do, but Won't
The technology to offer consumers near-wholesale roaming pricing already exists. The inter-carrier billing infrastructure is in place. The carrier network agreements already specify wholesale rates. There is no technical barrier to a carrier offering its customers international data at $0.10–$0.50/GB instead of the implicit $2–$5/GB rate embedded in daily add-on plans.
The barrier is commercial. Roaming is a high-margin product line for incumbent carriers. That margin won't compress voluntarily. It compresses when enough customers route around it — through travel eSIM providers, local SIM purchases, or switching to carriers with better international plans. The trend line is in one direction. Roaming charges will continue declining as eSIM adoption grows and alternatives become easier to discover and use.