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A Cellphone Without Borders [Oct. 2nd, 2007|09:36 am]
Wireless Industry News


September 27, 2007

A Cellphone Without Borders
NY Times


It's amazing the way the Internet keeps toppling traditional businesses.
Telegrams have gone away. Music CD sales are tanking. Newspapers are hurting.

One especially lucrative business, however, has somehow escaped the
Internet's notice so far: international cellphone calls.

That's about to change. Early next month, a small company called Cubic
Telecom will release what it's calling the first global mobile phone.

But first, some background. Cellphones from T-Mobile and AT&T rely on the
same type of network (called GSM) that most of the rest of the world uses.
In theory, then, you can take these phones to other countries and make
calls as usual. (Most Verizon and Sprint phones work only in the United

Unfortunately, international roaming runs from $1 to $5 a minute. A
20-minute call home from the Bahamas on a T-Mobile phone will set you back
$60. The same call home from Russia on an AT&T cellphone will cost a cool $100.

Sure, you could always rent a phone or use a phone card when you travel -
but then nobody knows how to reach you.

It costs a lot to dial overseas from here, too. Verizon charges $1.50 a
minute for calls to most countries. AT&T's rates can be truly Dr. Seussian
- like $2.52 to Greece, $2.80 to Iraq and $3.65 to Australia. That's per
minute. Make one 20-minute call to New Zealand, and you owe $75 to AT&T.

Now, most carriers offer special international plans: you pay more a month,
you get slightly lower roaming rates. But even they can't touch the appeal
of Cubic's cellphone. It makes calls to or from any of 214 countries - for
50 to 90 percent off what the big carriers would charge.

On this phone, a 20-minute call from the Bahamas costs $5.80 (that's 90
percent off T-Mobile's rate). The Cubic price from Russia is 49 cents a
minute (90 percent lower than AT&T).

And there's no monthly fee and no commitment for any of this. It works like
a prepaid phone, where you put some money in your account and use it up as
you talk.

At this point, the appropriate world traveler's response ought to be
involuntary drooling, but there's more to the story. Most of it is more
good news, but also more complexity.

For example, consider this: at the MaxRoam.com site from Cubic, you can
request local phone numbers in up to 50 cities at no charge. Now you can
have a Paris number, a London number and a Mexico City number that your
friends overseas can use to call your cellphone.

No longer must you hand out a series of international phone numbers for
each trip you make, or expect your colleagues in the United States to pay
$50 a pop to reach you.

Cubic points out that this feature alone is a life-changer for people who
have moved, for example, to the United States from overseas. Their family
back home can keep in touch for the price of a local call.

I signed up for numbers in Paris, London and Barcelona, and then asked
friends in those cities to call me. They dialed local numbers, and my phone
rang in New York - very slick. Voice quality was typical of Internet calls:
perfectly understandable, but slightly muffled, with a quarter-second to
one-second voice delay.

Even that's not the end of this phone's possibilities. For a flat $42 a
month, you can turn on its unlimited Wi-Fi calling option. It lets you
receive unlimited unmetered calls to any numbers in the world from Internet
hot spots, or make them for a penny a minute. Either way, you have little
fear of racking up your bill.

This works on hot spots that require a password, but not ones that require
a Web-page login. And in contrast to the new HotSpot@Home phones from
T-Mobile, which seamlessly hand off calls between Wi-Fi and the cellular
network as you move, the Cubic phone drops the call when you leave the hot

Still, if you make a lot of international calls, this option could save
even more money. The voice quality is excellent, although these Wi-Fi calls
are sometimes marred by random beeps, clicks or dropped connections.

In some ways, the Cubic phone isn't just different; it's actually
eccentric. As a phone without a country, it requires a country code and
area code for every call, even next door.

The bigger weirdness: when you dial a number and press send, your phone
rings a few seconds later. When you answer, you hear a voice saying,
"Connecting your call," and then you hear the other person answer.

That's the Cubic's big trick at work: It carries your call over the
Internet. Therefore, placing a call just sets off Cubic's own system to
call you back, avoiding the big carriers' expensive cellular networks.

This, too, takes getting used to, and it also adds about 25 seconds of
waiting to every call. It helps if you keep chanting: "90 percent savings,
90 percent savings."

That's one reason you won't want to use the Cubic as your main cellphone.
Here's another: everyday domestic calling rates haven't been determined
yet, but will probably be a steep 15 cents a minute. Because there's no
monthly fee, though, there's no reason you can't just keep the Cubic in a
drawer until you travel (or place international calls). When you travel
abroad, you can either forward your regular cellphone number to the Cubic,
or change your voice mail greeting, instructing people to use your Cubic's
number while you're away.

The Cubic phone itself isn't much to look at. It's a slab-style camera
phone made by Pirelli - yes, the tire company - with clunky menus, a very
slow start-up and a tendency to freeze.

But here's the other dizzying news: Cubic's cheap global dialing has
nothing to do with the phone. The real magic is in the SIM card, the memory
card that determines your account information.

So get this: For $40, you can buy this card without the phone. Cubic says
that you can slip it into any GSM phone - even your regular T-Mobile or
AT&T phone, as long as it's an "unlocked" phone (one that works with other
companies' SIM cards). Then your own cellphone behaves exactly like the
Cubic phone described up to this point, minus the Wi-Fi calling, of course.

This is a lot to absorb, and it's going to be tough for Cubic to explain
all of it to the masses in a short tag line. (So far, it's going with "All
Global Calls Are Local Calls." Not bad.) Maybe it would have done better to
introduce one feature at a time.

You should know going in, too, that the company responsible for tearing
down this bastion of outrageous roaming rates is a little group of 13
people in Ireland, with vast experience in calling cards but none in
cellphone sales. Its plans are ambitious, disruptive - and incomplete.
Several pieces of its system have yet to be slipped into place, including
tech support, customer service, documentation, Internet data plans and
domestic calling rates. But what the heck-here's a $140 phone, or a $40 SIM
card, that can save you thousands of dollars a year. Depending on how many
international calls you make, it could pay for itself in a week or a month.

If nothing else, this ingenious melding of the cellphone and the Internet
should strike fear into the hearts of the giant corporations that are
currently bleeding travelers dry. This is how the last great overpriced
pre-Internet racket will end: not with a bang, but with a SIM card.