Truphone: New-model traveller MVNO


Roaming charges have been an issue for consumers and businesses for ages, and a rich source of revenue for network operators. The hefty fees for calling from abroad on a UK SIM, and the customer ‘bill shock’ associated with them, has recently forced the European Commission (EC) to intervene and set a cap on the possible charges customers can incur.

New legislation dictates network operators must issue customers with a warning when they approach €50 (£45) of roaming spend, and cut their services off during foreign jaunts when they exceed their limit.

But the EC has so far resisted calls for it to also force network operators to reduce roaming rates, and so users will still find their money gets them little when calling from overseas, even if bill shock is now limited.

Which is a temporary reprieve, one supposes, for any business based entirely upon the premise incumbent operators are rip-off merchants for overseas calling.

Certainly UK VoIP provider and debutant global MVNO (mobile virtual network operator) Truphone reckons it is primed to take on the big boys by undercutting their roaming charges and allowing customers to operate freely abroad without watching their telephony spend. Indeed, Truphone calculates the global market of international travellers to number 125 million, with 11 million of them residing in the UK. And it is ready to fight the big network brands for these jet setters.

Expansion and rates
How? Well, its Local Anywhere SIM offer launched in late February in the UK in partnership with Vodafone, and in the US also with an undisclosed network operator. The service will be available in Australia too, a country with over one million UK expatriates, in June through a wholesale agreement with operator Optus.

Truphone says it will roll out to 22 other countries by the end of 2011, making the Local Anywhere offer considerably more compelling as travellers will be able to take advantage of its roaming rates beyond just US and Australian borders.

The prepay SIM offer is available in two forms: customers can select ‘standard’ rates and pay per-minute and per-text for prescribed fees, or pay a rolling subscription of £7.99 for a month’s usage at its ‘local’ rates. Also, Local Anywhere customers can attach local country numbers to their prepay SIM to get calls at local rates in overseas markets – an unlimited number, charged at £12.99 per year and per number. That small print, stings.

But Truphone argues the savings when calling from a Local Anywhere SIM card are substantial when compared with other networks’ prepay roaming offers. As a frame of reference, it says a Local Anywhere call to the UK from the US is charged at 22p per minute to a mobile, 10p to a landline, 7p to text and 10p to take a call. Of course, at that rate, customers must fork out £7.99 on top for the ‘local’ rate – otherwise customers are charged 75p per minute to a landline or mobile, 40p per text and 50p to receive calls.

Still, it says O2 charges 99p per minute for calls from the US to UK O2 numbers and landlines, £1.49 to rival carriers and 99p to take a call. Vodafone charges £1.35 per minute to make a call, Orange charges £1.30 per minute and T-Mobile charges £1.20 per minute. So the draw for customers is also clear.

Truphone chief executive Geraldine Wilson says its new low-cost MVNO proposition will help it steal customers from major networks, and also contribute 80 per cent of its revenues down the line. “We work to drastically reduce the costs of roaming and international calling through all our services,” she says.

Full article in Mobile News issue 461 (April 12, 2010).

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