Update: As is noted in the comments below, the company gave out misleading information on its rates prior to launching. To see correct pricing info, check here.
Pat Phelan, the Irish entrepreneur whose startup AllFreeCalls provoked major irritation in AT&T, has set out to put a burr in the pants of telecom giants once again, this time with a new wireless startup.
His Cubic Telecom, operating under the brand name MaxRoam, will provide cell phone users with a SIM card that enables global calling for rates between 20 and 30 cents a minute in more than 160 countries. Many large wireless operators charge dollars each minute to people who call from areas outside their nationwide roaming plan. MaxRoam’s rates for calling from anywhere in the world, by comparison, are only slightly more expensive than most U.S.-only pay as you go plans.
MaxRoam will allow its users to either use call forwarding from their own number, or take on local numbers as they travel, up to a maximum of 50. The SIM can work in any regular mobile phone; alternately, customers can buy a MaxRoam phone, manufactured in Italy by Pirelli, at $135 for the basic model or $299 for one with more features.
Another interesting detail about MaxRoam is that its branded phones will be able to make completely free calls when a WiFi connection is present. This feature is similar to T-Mobile’s Hotspot @ Home program, which the New York Times’ David Pogue drooled over this summer.
Phelan claims that, unlike VOIP, the voice clarity of his cellphones when used on WiFi is crystal clear from any location with a decent internet connection.
When I asked whether MaxRoam’s profit margins would be high enough to support the service, he laughed. Phone companies can pick up blocks of minutes in most countries for less than one cent per minute, he said, opining that most cell companies are in the business of cheating their customers; even charging the end customer only 20 cents a minute still provides a healthy profit.
The service will find some competition from carrier plans that allow for limited overseas roaming — in the US, notably offered by T-Mobile and Cingular. Traveling extensively often requires buying special SIM calling cards in each country visited or renting cell phones, in order to keep costs down.
While the service is undergoing its launch today, Phelan is already in talks with the U.S. military to provide overseas calls for servicemen, and also mentioned, off the record, a large web company that had shown interest.
Although Phelan is keeping to the modest target of signing up 10,000 accounts over the next 18 months, he also plans on unveiling a $30 per month plan for unlimited calling, which will include a free phone, and initiating a $5 per megabyte rate for data transfers.
Cubic Telecom’s initial funding was €3.5 million from Irish property developer Declan Donohue, and a further €1.5 million from other private backers. The company is in talks with venture capital firms for another round of funding.
Tags: Co:Cubic-Telecom, deal, inv:Declan-Donohue, MaxRoam11 Comments
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Tom said:
Where does this 20 to 30 cent per minute number come from. The only example I could find on the website is 74 cents per minute from austraila to the US.
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Yuri Ammosov said:
Matt: I cannot believe you have not done competition analysis on this sector! Travel SIM card have been around for years, most are easier to use, and the rates this one charges qualifies in this sector as a rip off! Not to mention that all these roaming-optimization companies operate in fact in a grey market and are generally tolerated by large telcos only because they let them optimize otherwise unsold minutes, but the moment they start getting into their roaming revenues they get squeezed real hard. Quite a difficult business model - and pretty much a clone.
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Chris Morrison said:
Yuri: Matt didn’t write this post; I did. Regarding travel SIM cards, those I’ve seen have highly variable rates that can go well over $1 a minute in some countries. Asserting that they’re easier to use seems odd, unless you’ve had a chance to use the MaxRoam SIM.
Regarding their being a clone — no, having a global SIM isn’t a new idea. Trying to do it with your own branded handset that can make free WiFi calls is, as well as the plans he’s got for the future. I’m also curious as to whether they’ll get squeezed by telcos.
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Tom said:
We will see soon. I have to say that I am getting weary of what the pricing will actually look like. This is since the best pricing deals in telecom are nearly always promoted(the actual prices) at the time of product anoncement. It seems that MAXroam is holding back untill actual release. This only makes sense if they are concerned there might be a suprise when prices are a bit higher than expected. Myself I am going to be looking at the GSM prices since I already talk free via SIP service on WiFi hot spots. The only actual example price that has been released is 74 cents from australia to US. Not 20 to 30 cents in some ‘press releases.’ By far the best deal in GSM is from a some of the asian operaroters that charge only a normal long distance charge(often under .25 US) to the countries you are roaming in for incoming calls. You can pair that up with a callback service for inexpensive outbound calls.
The MAXroam and cubic sites are supposed to be ip on tuesday; untill than we can wait.
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SMS said:
At “http://www.cubictelecom.com/faq/#q18″ they do have a rate example for a 12 minute call from Australia to the U.S.
“Total cost: US ($0.29 + $0.42 * 12) = US $9.23″
Two problems:
First, their math is wrong, as that equation works out to U.S. $8.52, not $9.23. Where did the extra 71¢ come from? I think they multiplied the per minute rate by 13, not 12.
Second, assuming they actually do mean $0.71 cents per minute, this is much higher than a company such as GeoSim which charges $0.50 for the same call. MaxRoam is 42% more expensive.
If I want a U.S. number, I can use a service such as VoiceStick and forward the number to the international GeoSim number in the UK, and since the incoming calls are free on GeoSim, pay only the Voicestick charge to call the mobile number in the UK. So if you have to contact someone from your mobile, you call them, pay for one minute, and have them call you back.
The complete rates haven’t been published yet, but it may be that the real attraction of MaxRoam is for making calls within a particular country. The WiFi/GSM phone, assuming it’s a quad-band phone, is also an attraction, though I don’t know if free WiFi is as pervasive worldwide as it is in some parts of the U.S..
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SMS said:
Well the in-country rates are up at “http://www.maxroam.com/how-much-does-it-cost.asp” and as expected it’s no great deal.
Examples:
Within the U.S.:
GeoSim: $1.45/$1.45
MaxRoam: $1.55 receive/$1.66 makeWithin Italy:
GeoSim: $0.00 receive /$0.51 make
MaxRoam: $0.30 receive/$0.44 makeAustralia-U.S.
GeoSim: $0.00 receive /$0.50 make
MaxRoam: ? receive/$0.71 makeI think they’ll be marketing this service based on the WiFi capable handsets, the availability of U.S. phone numbers, and the in-country rates for making calls, but certainly not on their per minute rates.
Whoever’s writing these articles about MaxRoam probably doesn’t realize that there have been international prepaid SIM cards available for a long time, and didn’t bother to do any research, instead just quoting press releases.
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andy said:
“Yuri: Matt didn’t write this post; I did. Regarding travel SIM cards, those I’ve seen have highly variable rates that can go well over $1 a minute in some countries. Asserting that they’re easier to use seems odd, unless you’ve had a chance to use the MaxRoam SIM. £”
_But Maxroam also goes over $1. And in Europe, it is broadly similar rates to the new Eurotariff, not nearly 50% cheaper as suggested by Mr Phelan.
And not all the tariffs are there: no specification of tariff variation for different destinations, such that another blog suggests that 214 countries’ landline and mobiles will all cost the same - surely wrong.
Although the forwarding from a landline, effectively switching from caller pays to receiver, will attract some, people with other global or local SIMs at least have a choice to arrange their own call forwarding, and quite probably for lower tariffs.
I wonder if Cubic have switched to this deal from the one previously resold because of higher margins, not for the chance to market lower rates.
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Bob Miller said:
WARNING:
I have a Geosim; Just got back from 3 weeks (9/18-10/11/07) trip to Greece, Romania, Ukraine, Russia and Turkey. Took my GeoSim and Razr phone. Surprise: WOULD NOT CONNECT WITH ANY LOCAL SERVICE; Happily we had our AT&T Sim, which worked fine. On return, found out that GeoSim service distributer had cut them off as of Oct. 1 and still is out as of Oct. 14.
You lose your prepaid reserve and sim is useless.
Probably could happen to any of these discount European sellers, but that is a danger for any of these shoestring operations, so consider if savings are worth it.
At least you know AT&T or Sprint will be there. -
Ian said:
Maxroam seems rather dubious, their much touted Pirelli phone is still not up and running and their terms and conditions are outrageous. Moreover they are woefully undercapitalised. Lots of good publicity for them but I doubt whether they will deliver. Journalists really should do a better job of checking up on these sorts of companies rather than uncritically regurgitating their PR.
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Max said:
Hi - just wanted to say good design and blog - cu
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Ed said:
Ref Mr Miller.
GeoSIM was not “cut Off” in October 2007. A lot of “global” SIM uppliers were seriously affected by the temporary collapse of a service provider. GeoSIM users can still use their SIM and no call credit was lost on any customer account.
All systems are operating as normal.
4 Trackbacks
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Calling Cards » Calling Cards September 17, 2007 3:51 pm said:
[...] MaxRoam, a low-cost alternative for mobile international calls Traveling extensively often requires buying special SIM calling cards in each country visited or renting cell phones, in order to keep costs down. While the service is undergoing its launch today, Phelan is already in talks with the US … [...]
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[...] plans. Their service, MaxRoam, is clearly well planned-out. For a more in-depth analysis, check out VentureBeat’s separate post today on the company. Competing mobile VoIP services are cheap or even free, but are unreliable. Its offering you a [...]
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[...] a very interesting way of attacking it. I wish I could invest (Pat?, nudge wink?). More coverage on VentureBeat and [...]