Cork firm wants to flatten the telecoms world

18 Sep 2007

An Irish company presenting at the prestigious Tech Crunch event in San Franscisco has come up with a plan to end what it describes as an international telecoms rip-off by mobile operators and make cheap and affordable phone calls made available worldwide on its own-branded phone.

Cork-based Cubic Telecom led by Pat Phelan has raised funding of €3m from property developer Declan O’Donohoe and has struck a deal with Italian tyre manufacturer Pirelli to manufacture the devices; one a Wi-Fi-based device and the other a Windows Mobile GSM phone.

The Tech Crunch event held yesterday in San Franscisco is attended every year by several hundred venture capitalists and this year more than 850 technology companies battled for a mere 40 places, one of which went to Cubic Telecom.

Phelan said the intention is to attract funding in the region of €20m to fund the global distribution of its mobile devices and services.

Phelan said he was inspired to make the move to lower-cost telecom services during his time as a head chef in a Thai restaurant in Cork after observing immigrant workers queuing for hours to make calls home to their loved ones. “Those calls would cost them a fortune. I found a way to help them make those calls cheaply and that’s how we ended up in the phone business.”

He said that Cubic’s phone service is envisaged to be available to anyone in the world that wants it and that once having secured the necessary funding, the company will proceed to offer the devices for free to anyone who signs a €30 a month contract.

He said that using the service Cubic users can arrive in any country in the world and get roaming rates that are up to 90pc cheaper than current prices charged by mobile operators.

He said that on average mobile minutes can be bought for three-quarters of a cent and that an Irishman travelling to Spain today would typically be charged 59 cents per minute to make a call by traditional mobile operatos.

“The terrible truth is that we are all being totally and utterly being ripped off by mobile operators. If I go to Spain and my mobile operator recommends I log onto their Spanish network they will charge me 59 cents for the pleasure of making a call on their network.”

He said that the irony is that because most mobile operators’ networks are based on internet protocol (IP) the calls are costing the operator nothing.

To pass on the cheaper call costs Phelan said Cubic has used much of its investment to date to buy up call minutes at the lowest price possible.

Explaining how it works Phelan said: “There are two scenarios. First, if you’re leaving the country you buy a SIM card for €29.99, you pick a local number at home you want the calls routed through and when you’re making a call in New York or London you can make calls of between 15 and 20 cents or less. Once outside the EU you are making savings of €200 or 90pc off regular roaming rates.

“In the second scenario we provide you with a phone for €99. If you’re hotel has Wi-Fi, instead of calling through your phone’s SIM card you can ring over the internet using session initiation protocol (SIP). Using this we can get your calls to wherever you want at the least possible rates.

Phelan explained that his company’s MAXroam universal SIM allows a person travelling to select local numbers in cities he/she is visiting. “If they are in Berlin when a call comes in they just pay a local rate in Berlin to recive a call. If they are in a hotspot in Berlin we’ll transfer the call to their voice over IP account and it would be free.

“So ultimately you can travel the world, make locally-priced calls and your friends pay local costs too.

“We’ve built out a completely new architecture based in SIP and we’ll be helping the guy in Bangladesh or Warsaw as much as the guy in Cork. We’re flattening the planet completely,” he laughs.

By John Kennedy