MAXroam is the New Skype!

Implications: MAXroam is providing a solution to one of today’s biggest problems in mobile phones – the cost of International roaming.  They are offering both data and voice Internationally at reasonable rates.  They are potentially the next Skype, with a similar value and impact on the carriers.

Analysis: Enterprises have been very successful in recent years in reducing costs around data and voice.  The advent of VoIP has driven prices to unforeseen depths and made bandwidth available that one could only dream about a few years ago.  Mobile phones have not generally been able to take advantage of similar cost savings.  Corporate data plans offered by AT&T, Sprint and other mobile carriers generally provide favorable terms in regards to minutes, local and long-distance calling.  International roaming, however, remains a sore spot.

It is not uncommon for a person with a corporate mobile plan, who normally spends perhaps $100-$200/month, to suddenly incur a monthly charge of $1,000 or greater when travelling internationally.  Even on “good” corporate plans International roaming rates are frequently anywhere from $1-$5/minute.  At those rates it’s easy for a novice traveler to spend several hundred or thousand dollars on a single trip for mobile charges.  Telecom managers have grown accustomed to the shock on the user’s face when told their mobile charges for their last trip were several thousand dollars.  However, even once travelers are educated, in many cases there is little alternative.  Executives, sales people and others must communicate while traveling, and in many cases the mobile phone is the best, or only way of communicating.

Data charges are even worse.  At least the traveler usually has some understanding of how much time they’ve spent talking on their mobile phone.  In most cases they have little or no understanding of how much data they are handling.  This has not historically been a problem, since data use on mobile phones has been minimal.  However, with the growing popularity of Apple’s iPhone and other smartphones, data use is skyrocketing, and already unwary travelers are getting hit with huge charges.

The carriers refuse to act.  This is a tremendous cash cow to them, and since each carrier has similar charges, the customer has no choice beyond not using their mobile phone.  In the midst of this, MAXroam has dropped in with a solution.  The economics are such that most enterprises cannot afford to ignore them.  The number of International travelers in most enterprises may be relatively small, but their impact on the enterprise telecom bill is huge.  Telecom managers have been seeking a MAXroam-type solution like a drowning man seeks water!

MAXroam has only to prove their service really works, and get the word out to telecom managers.  Once that happens either the mobile carriers will have to respond with similar pricing or watch their business move to MAXroam in a flood.  The carriers don’t have to offer equivalent pricing to MAXroam to retain the business, but it has to be a LOT better than today.  In Europe the problem is far worse than in the USA, since in many cases European users can get hit with International roaming charges within Europe itself.

The handwriting is on the wall – the days of outrageous International roaming are numbered!  AT&T, Sprint, and others should start to prepare for the inevitable.