Cell Buddy is on a quest for the Holy Grail of the cellular world: A universal SIM.
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It isn't quite there yet, but this small startup from Tel Aviv has achieved the first stage: a single SIM card for roaming around the world. This international SIM card is near final testing phases and should hit the world markets after that.
At a later stage, Cell Buddy even envisions sparing people the need to change their SIM card when they switch mobile operators.
A SIM card is like your phone's ID. Right now, when you join a mobile operator, you get a SIM for your phone from it. If you switch operators, you have to switch SIM cards. And this problem becomes acutely painful when you travel abroad.
At present, when abroad, you are a "roamer," which means you are a guest with a different mobile operator with which your original operator has an agreement. But actually using your phone that way is (usually) ridiculously expensive.
Another option is to buy a local SIM card (which can be available from drugstores, kiosks and vending machines in some spots). But unless you do serious research you won't know which SIM is best to buy, which gets you the best service program and so on; and that's even assuming you know how to replace the SIM in your phone.
Enter Cell Buddy. “Mobile communications is the biggest industry in the world, with 6.8 billion users and annual turnover of $1.5 trillion,” says Ofir Paz, Cell Buddy’s founder and CEO. “The biggest problem in the industry is roaming, when you travel abroad. If the average cellular customer in the world pays $0.50 per day for local use, when traveling abroad it costs $10 per day — twenty times more. Roaming is a $70-billion per year industry.”
Which is great for the mobile operators, rather less for you.
This is how Cell Buddy’s solution works.
The heart of its solution is the Cell Buddy’s server (see picture), onto which the company loaded hundreds of SIM cards from all over the world. Also, the customer has to have a Cell Buddy SIM in their phone, and to have uploaded the Cell Buddy smartphone application to their phone's menu.
Now, when traveling abroad, the customer activates the app, which then presents a list of relevant local mobile operators and the programs they're offering - $10 a week, $45 a month or whatever.
"How do you know which operator is the most affordable?" says Paz. "Which provides the best coverage?" The Cell Buddy platform is like a price-comparison portal: it companies to offer their wares and lets customers make their own choice. "Imagine that you’re going to France, so when you’re in Paris for two days, you connect to Free Mobile because it’s the cheapest. When you travel to a village, you connect to Orange because their reception is better."
Instead of actually physically changing your SIM, the Cell Buddy card emulates the foreign operators' SIMs. It’s all virtual.
When customers choose a plan, the SIM card in their telephones receives the identity of a specific SIM card on the server, giving the customers the equivalent of a new SIM card in their cellular phones.
Why it's good for the company
“We have SIM cards from 60 countries, and we’ve tested the solution in more than 30 countries," says Paz. "We don’t go abroad to buy the SIM cards; the companies send them to us. They want to be part of the platform, and if a certain provider doesn’t want to be part of it, that’s perfectly all right."
Why would they want to be part of this plan, if they're not selling SIM cards to roaming tourists?
The SIM cards sitting in Cell Buddy's server are deactivated. When the tourist chooses a provider through the Cell Buddy app, the SIM in the server comes to life. Say the consumer chose Pierre Telecom, with its $10 a week plan; the app then asks for the consumer's credit card information, and Pierre gets the $10.
"We don’t do market research and choose for customers because if someone travels to Cambodia, for example, I don’t know which provider there is the best. We want to have a rating system with stars, like Amazon’s, where customers give marks and you can choose wisely,” says Paz.
How the mobile operators stick it to the user
Very few people know this, but it’s important to note that when customers travel abroad, their cellular devices don’t necessary lock on to the provider with the strongest signal. Cellular operators usually lock customers into the providers abroad with whom they have the best contracts (the largest amount of revenue per minute), even if that doesn’t work in the customers’ favor. This technique, known as “steering,” benefits the large cellular providers.
For example, tourists who travel to Israel from France may be locked into the Partner network because Partner signed a contract with Orange in France. Since it is highly likely that a small company such as Golan Telecom will not see any revenue from that tourist, Cell Buddy’s solution benefits mainly the small operators.
After two years of work, Cell Buddy is almost ready to launch.
“We are two months away from a beta version [in which customers test the product],” says Paz. “We have registered three patents and are in the process of registering a fourth. The business model will be to sell directly to the consumer, let’s say for $60 per year, and you’ll never have to change a SIM card again.”
Paz is a veteran player in the hi-tech field. He has already had two exits: he sold Peach Networks to Microsoft and made the medical-device firm InspireMD a publicly-traded company. So far, private investors have invested roughly $2 million in Cell Buddy ($500,000 of which came out of Paz’s own pocket), and the company is about to begin another fundraising round. “This will be the third exit,” Paz says.
(Cell Buddy’s channel on YouTube: http://www.youtube.com/user/CellBuddyLtd)