Thank God We Have the European Union!

No really, I do mean it. Thank the Lord for the existence of the European Union.

For, as you will remember, they passed some laws a few months back that made roaming across international borders with your cell phone cheaper. Isn\’t that lovely?

Well, yes, indeed it is:

One especially lucrative business, however, has somehow escaped the Internet’s notice so far: international cellphone calls.

That’s about to change. Early next month, a small company called Cubic Telecom will release what it’s calling the first global mobile phone.

Now, most carriers offer special international plans: you pay more a month, you get slightly lower roaming rates. But even they can’t touch the appeal of Cubic’s cellphone. It makes calls to or from any of 214 countries — for 50 to 90 percent off what the big carriers would charge.

For example, consider this: at the MaxRoam.com site from Cubic, you can request local phone numbers in up to 50 cities at no charge. Now you can have a Paris number, a London number and a Mexico City number that your friends overseas can use to call your cellphone.

No longer must you hand out a series of international phone numbers for each trip you make, or expect your colleagues in the United States to pay $50 a pop to reach you.

Even that’s not the end of this phone’s possibilities. For a flat $42 a month, you can turn on its unlimited Wi-Fi calling option. It lets you receive unlimited unmetered calls to any numbers in the world from Internet hot spots, or make them for a penny a minute. Either way, you have little fear of racking up your bill.

But here’s the other dizzying news: Cubic’s cheap global dialing has nothing to do with the phone. The real magic is in the SIM card, the memory card that determines your account information.

So get this: For $40, you can buy this card without the phone. Cubic says that you can slip it into any GSM phone — even your regular T-Mobile or AT&T phone, as long as it’s an “unlocked” phone (one that works with other companies’ SIM cards). Then your own cellphone behaves exactly like the Cubic phone described up to this point, minus the Wi-Fi calling, of course.

So what\’s all this got to do with making roaming on the traditional networks cheaper? Well, by insisting that roaming is cheaper, they\’re compressing the pricing against which Cubic is competing: making it, therefore, more difficult for it to enter the market and prosper.

So the nett effect of the European Union regulations is to further entrench the incumbent Telcos at the expense of the upstart market entrant. That upstart being the one offering us 90% of roaming charges.

Thank God we have the European Union, eh?

Can we leave yet?

 

 

2 comments on “Thank God We Have the European Union!

  1. Methinks Timmy overstates the case.
    The new entrant would have compressed the pricing anyway. The wider point, which I expected him to make when I started reading it, is that the whole exercise of taking action at EU level over a pricing strategy between companies and customers, was actually completely unnecessary. Technology and competiton works better

  2. “Technology and competiton works better”

    Provided it’s true competition. The whole GSM operators club is a bit of a cabal to conspire against customers. OK, so someone has found a way around the club rules. But I bet, though, that like Freddy Laker, these new guys are soon shut out, with dirty tricks if necessary.

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