New Answer to the High Cost of Mobile Roaming Charges
Houston – (AXcess News) Roaming, the charges incurred by mobile users when outside their carrier’s market, is fast becoming a point of contention though Polar Wireless (Otcbb: BCDI) says its SIMs chip is the answer.
According to Informa Research, "Outbound roaming voice traffic will grow from 22 billion minutes in 2006 to 70 billion minutes in 2011.” A 69% growth in annual voice traffic with mobile users facing a complex range of charges that include both inbound and outbound calls.
In Russia, where Polar Wireless first entered the roaming marketplace, costs can range from as little as 40 cents per-minute to as high as $3.00, when comparing rates as shown on RoamingAdviscor.com, a UK-based site which claims to be “the only independent mobile roaming cost comparison engine on the internet.”
Polar Wireless says it delivers an affordable solution which includes not only voice but text and data through its SIM chip without having to change numbers. Its first entrance into the marketplace was in Russia where Polar Wireless announced on February 2, 2011 that it had opened its first Customer Call Center and Data Center.
BCDI CEO, G. Kelly O'Dea, was quoted as saying, "Russia was one of the fastest growing markets for roaming in the world when it entered the marketplace and began development of its Russian operations nine months earlier. "The initial demand and feedback are very encouraging," said O'Dea. “We are confident that the Russian market will prove to be a good indicator of global demand."
Since then Polar Wireless has been on the march, expanding services through new Call and Data Centers to serve customers in the Middle East, Europe and North America, having announced a string of deals to expand its market reach, the most recent coming Wednesday morning, April 20, 2011 when BCDI announced that it had completed the migration of its Global Data Center to the Bell Canada Data Center, a world class SAS70 and CICA5900 installation, which offered Polar Wireless a more robust, reliable network.
The Company says that is has shipped 15,000 chip sets to Russian distributors in preparation of its initial launch, which Polar Wireless believes could grow into a $3 billion market for the Company at a 10% market share.
The advantages, says, BCDI, is that its SIMs chip makes it unnecessary for consumers to change behavior, calling it “the only carrier grade solution” in the marketplace.
BCDI says its SIM chip “can bear the function of multiple Global SIM cards activated with multiple mobile operators. For example, in addition to the main home SIM card provided by the local operator, it could contain virtual SIM cards activated with global mobile operators. As the customer crosses the borders of various cellular networks, Polar Wireless will automatically note this and activate the virtual SIM card to the most suitable cellular operator thus helping to maintain low-cost communications while abroad.”
Indeed, a service that can select the lowest cost roaming provider for you when you cross borders into another country could almost make a website like RoamingAdvisor.com obsolete. Yet the UK-based site says regulators in the EU are squeezing carriers to lower fees, though many mobile providers have raised rates so high that a 70% haircut still leaves them with a 110% margin, which would continue to give Polar Wireless an edge over other SIMs providers far into the foreseeable future.
A recent research report by Zacks placed a target price of $0.95 on BCDI, noting that the company is “in the sweet spot of this high-growth area,” according to Ken Nagy, CFA. “We like the firm’s business model,” said Nagy. Though he noted too that the cash-burn rate the company was experiencing would make it necessary for raising additional capital. Yet Nagy didn’t take into consideration whether or not Polar Wireless could qualify for debt financing ,if needed. With only 68 million shares outstanding at its current price the valuation is a bargain at $50 million, making it a tempting target for mobile carriers.
In an April 5th news release, Polar Wireless noted that its Russian General Distributor, SKT, “utilizes and extensive reseller network throughout Russia and the former CIS states, including the Ukraine and Kazakhstan,” that reach an estimated 350 million mobile users and that it expected pre-order demand to well exceed 50,000 SIM chip sets.
SKT’s orders could place Polar Wireless in a position to obtain financing quite easily, making Nagy’s nagging comment a moot point and possibly giving the Analyst a reason to revise Zacks’ report.
"With SKT's extensive distribution and established reputation for quality, we look forward to forming a strong partnership with SKT and achieving our mutual objectives. This initial shipment of chip sets is the first step in that direction," said O'Dea.