If there’s one thing everyone can agree on in the midst of Canada’s ongoing wireless war, it’s that roaming rates are way too high. As anyone who has accidentally checked their email while in another country only to find to an astronomical bill awaiting them on their return home can attest to, there’s almost nothing more expensive. That’s why both the federal government and the Canadian Radio-television and Telecommunications Commission are either trying to encourage more wireless competition or are investigating roaming rates.
Into this melee steps Toronto-based startup KnowRoaming, which has just emerged from “stealth mode.” After 18 months of building its technological solution to the problem – a circuitry-laden sticker that users pop onto the SIM card inside their phone, essentially ‘localizing’ it – the company is now taking pre-orders on a service it says will cut roaming bills by 85 per cent.
While there have been other roaming alternatives available for some time, the company thinks it will have the simplest and cheapest answer yet when it officially launches in January.
Name and its origins: The company’s founders tried out a number of names, but settled on a pun. The “Know” part encourages users to get educated about using their phone in another country, while it also doubles as “no,” suggesting that they’re not actually paying exorbitant amounts to do so.
Education and experience: Chief executive Gregory Gundelfinger is a serial entrepreneur from South Africa, who previously co-founded Roomscape, a print brokerage company that processed bulk orders for retailers and media organizations. He’s also a lawyer and co-founder of Overseas Free Call, a long-distance provider. His cousin and KnowRoaming chief technology officer Mathew Stein attended York University and is a former design engineer at Evertz Microsystems and IT manager at Machinery Network.
Big idea: KnowRoaming’s sticker attaches to any size SIM card, then connects to GSM wireless networks in conjunction with an app on the user’s phone. The company has negotiated rates in 220 countries through “mobile network operator enablers,” or wholesales that buy airtime and data from wireless providers around the world. “We’re not the first to do this. The difference is we have taken a holistic approach to the problem,” says Gundelfinger. “We want to make this as easy as roaming.”
Company they want to be: “We want to be like Skype,” Gundelfinger says. “What Skype did to revolutionize video and internet calling, we want to do for roaming.”
Funding: KnowRoaming’s seed investment comes from billionaire Nathan Kirsh, owner of the Jetro-Restaurant Depot, which sells wholesale goods to small stores and restaurants in the United States.
Reason they won’t succeed: With government and regulatory scrutiny of roaming fees happening around the world, big providers’ prices are inevitably going to head downward. The further they drop, the less room there will be for alternative providers such as KnowRoaming to operate.
Reason they’ll succeed: Simplicity is the company’s advantage, since its service only requires the user to restart their unlocked phone – there’s no additional SIM cards to swap in or out and no worrying about different-sized cards. Gundelfinger also believes that carriers have too much interest in keeping roaming rates as high as possible, so there will always be room for alternatives such as KnowRoaming. “The networks aren’t going to relinquish that easily. There still is money on the table,” he says. “It’s an arbitrage opportunity.”
Last word: Amit Kaminer, an analyst with telecommunications consultancy the Seaboard Group, says KnowRoaming’s network agreements in 220 countries is “huge” – “If they have that, they are most of the way there.” But, he adds, the company is not the only one that has noticed high roaming rates, with more alternative providers popping up all the time. “Speed to market will be important, so too will branding and differentiation. Customer care and customer service will be critical.”