I had the pleasure of speaking with Carl Guido Kirchoff, Managing Director of the Americas at United Mobile. For those who are unfamiliar with what they do, here is a brief description. United Mobile is a licensed MVNO providing worldwide mobile communication services with its own network infrastructure and international SIM card. Users can save up to 80% on voice and data roaming when on travel. The service provides free incoming calls on the cell phone in over 80 countries and outgoing calls from $ 0.45/min worldwide. The prepaid SIM card requires no contract nor a minimum fee. It is available for mobile internet with rates as from only $ 1.59/MB.
I would like to thank them for sponsoring the CTIA Party Page list on Mobileslate, they have gotten a lot of impressions from their sponsorship!
So you might be thinking, “Eric! Why are you talking to an MVNO? Isn’t that over and done?” Well, over the years, and frequently traveling internationally for both business and leisure, I like staying in touch with family and friends, but also being budget conscience, given the depressed US dollar. After speaking with Carl, United Mobile is more than just trying to accelerate to one million subscribers as fast as possible, it’s also trying to enable global travelers to save money.
The market for prepaid subscribers by 2010 is expected to grow to over 55M with transactions totalling over $30B in that same timeframe. With these large numbers, United Mobile can certainly gain a foothold in the US market.
Currently, on AT&T Wireless, calling the United Kingdom from the United States is $1.49/min to a landline and $1.69/min to a mobile phone. Dialing Hong Kong from the United States is $3.49/min to a landline and $3.52/min to a mobile phone. These high prices for the occasional call are significantly less with United Mobile, only $0.45/min landline or mobile. I did some digging and found out that if you were to sign up for the monthly AT&T® World Connect® plan at $3.99/month, you get heavily discount rates. But this requires you to spend $3.99/month upfront, regardless if you make 1 or 100 calls in that billing cycle.
Here are a set of questions that I asked Carl.
What is different about your MVNO?
Most MVNOs are in-country and only focus on the domestic markets, similar to a smaller version of the larger mobile operators. United Mobile for the past 6 years, is the only global licensed MVNO that spans more than 140 countries. Their core is focus on traveling only with a well-known “travel SIM”. Now adding a competitive offering to add local MVNO service (incoming calls for free for more than 80 countries). As well as International Roaming, United Mobile can know offer competitively priced local coverage for voice and data.
Why is United Mobile different?
The middle of last year, the company brought on new management and investment from the well-known VC firm, Accel Partners. In addition, Morton Lund, lead investor and board member for Skype, Kaj-Erik Relander from Accel, Charles Fränkl, who prior to heading United Mobile was CEO at AOL Germany. He was also a member of the Executive Board of E-Plus and director of data and multimedia products at Swisscom.
So you can obviously know that this is not just some guy who wants to have his own phone company, this is a serious company. Another difference is that fact that United Mobile is using the existing PSTN network and not VoIP, which at this point is arguably better voice quality.
Give me a typical use case for a United Mobile subscriber?
70% of travelers take their mobile along when abroad. 33% want to keep the direct connection to their company, even on holidays. 75% want to stay in touch with friends and 27% want to stay reachable for their colleagues at work. And it is not only voice minutes that we are trying to address. We will also be providing data services as well. When you travel, particular in Europe and Asia, there are not as many WiFI hotspots, cellular networks are dominant. But to pay for data roaming in a different country is a very costly proposition. The average cost per 1MB of data in Europe is about $5 and $10 USD. AT&T advertises $0.01/Kb, which equates to $10.24/MB. With United Mobile, it becomes much more economical at 0.99€/MB. Based on this, United Mobile’s Vision is to be global leader for niche segments, initially travel.
What is the strategy for United Mobile?
We are building a set of local and international product and service offerings to make it competitive. Particular in the US, we are working on a call through, post-paid, as well as data-centric devices, such as Blackberry, iPhone and others. This and more will be upcoming in 2009. We are constant improving in our footprint, functionality, and service.
The other goal is to eventually have a harmonize global rate plan so that you don’t think about how much you are paying, where ever you calling from and calling to.
What’s next?
We are active pursuing local MVNO agreements in key markets such as China, India, Korea?
Coming soon, will be a USB data card for your laptop. It is a complete SIM and USB stick which will allow you on a prepaid data service that you can stick with your laptop. The next closest competitor for a pre-paid data service $4.99USD/MB, but the restriction is that it is limited to in-county service. United Mobile will launch with a pricing plan that is International and at least 50% less. Instead of spending your time during your trip to go to the local store, and pick up a data SIM, if that is even possible, you have all that you need with you, and you just need to go and recharge your service online.
Final Thoughts
Time is money and the added convenience is certainly welcome. And with real-time online access to your account, you can manage the cost of your usage. So you could imagine a small company that can manage their mobile workers and costs all from United Mobile. With over 340M GSM phones were roaming outside their home country last year, this is market opportunity.
I have started using United Mobile from this year for work and holiday and it has been quite good. The only awkward thing that I need to get used to is having in country folks getting used to the idea of dialing a number based in Lichtenstein. I am waiting for the data card service to arrive so I can start testing it out.
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