15 Comments

Summary:

While most of the media attention at TechCrunch’s annual startup showcase in San Francisco was focused on the latest and shiniest startups, I ended up spending most of my day walking the demo pit, quietly checking out what was on display. And after that I checked […]

While most of the media attention at TechCrunch’s annual startup showcase in San Francisco was focused on the latest and shiniest startups, I ended up spending most of my day walking the demo pit, quietly checking out what was on display.

And after that I checked on the health of the alumni of 2007. I was most interested in Pat Phelan’s company Cubic Telecom, which got a reluctant and very partial thumbs up from me a year ago. To jog your memory, Cubic has a service called MAXroam, which sells you a SIM card that saves you crazy amounts of money when roaming overseas. Instead of paying the outrageous rates to incumbent carriers, MAXroam uses a VoIP-based architecture to offer calls at pretty cut rate prices. 

Phelan is an odd man out at these Web 2.0 events. For starters, like me, he was in his 20s a long time ago. He is a telecom disrupter. And he is obsessed with real-world metrics such as revenues and profits. Now that’s old school! Perhaps that’s why I enjoy the company of this acerbic Irishman with a heart of gold. 

When I showed up at his booth, he was all flustered. Pat had just busted Michael Arrington’s iPhone. He was showing off a new iPhone SIM-unlocking hack that allows you to use any service on the iPhone including data, not just the carrier who sold you the iPhone. Something went wrong and it took about 30 minutes to get the iPhone working again. And that was long enough to have Pat reaching for those nasty things I gave up in January. After giving him hell for sucking down on the coffin nails, I asked him, how is business?

Pretty good, he said.  And it was about to get better. MAXRoam now has over 100,000 paying customers. The company is bringing in substantial revenues (and some profits.) It is enough that Phelan has no plans to raise more capital for his company. He has announced Version 2 of its service, which includes data roaming and U.S. roaming. Overseas travelers could pay 40 cents a minute for roaming in the U.S., a huge savings when compared to roaming charges of around $2.99 for every minute of talk time.

Will that be enough? I don’t think so. 

My argument last year was: Selling discount minutes is a tough business and making money off it is even tougher. What you need is scale. Phelan thinks he will get thereir by selling MAXroam V2 as a white-label solution for other consumer brands. For instance, Phelan is very close to announcing a deal with one of world’s largest travel agencies, which will sell branded MAXRoam-powered service in places like India. He feels that by working with such well-known consumer brands he can accelerate the number of people making calls using MAXroam, which would allow the company to make more money. We will check in with Pat in a couple of months and see how he’s doing. 

  1. I hope he does well with this product. I used his international long distance circumventing products (two iterations) and was happy with them. It’s a shame they were shut down.

    Small typo, sir:

    “Phelan thinks he will get their by selling MAXroam”

    Share
  2. Data roaming?! Now I’m interested. Anytime I take my Canadian Blackberry to the US, I get slammed with outrageous data rates. And with the near monopoly situation up here, that’s not likely to change soon. This is a pain lots of other people feel too.

    Share
  3. @ Raymond

    Thanks for the correction. I fixed that. I know Pat is going to get this right. He knows what he is doing.

    @Shai,

    It might be worth checking out. I have not checked out just yet. Sometime today perhaps.

    Share
  4. These are the kind of businesses I would love to hear more about at these conferences (TC50, DEMO). Being in NYC, I know a lot of travelers that would be interested in this. I definitely will check this out.

    Share
  5. @JP, while you are at it, check out rebtel as well, especially if you make a lot of long distance calls.

    Share
  6. @JP… i meant international long distance calls. Sorry – hit post before I could say post.

    Share
  7. G’wan the Irish. Nice coverage Om.

    Share
  8. If you are in Canada, check out Alligato Mobile for long distance calling as well. Unlike Rebtel, no client or dataplan required.
    Cheers, GD.

    Share
  9. he might face competition from dual sim phones and pdas, more and more popular for the very same reason like his product. but keep going !!!

    Share
  10. I think if MaxRoam.com put their charges in USD, indeed, any user’s local currency on their site, it would be easier for people to weigh up the merits of the service. I think they might also look at reducing the delivery costs and lead times for getting the SIM cards out to you, by perhaps using forwarders or drop-shippers.

    Tying in with travel web sites is a great way to scale things, but I think tying in with conferences that draw an international audience, and corporate travel providers might also be fruitful.

    Share

Comments have been disabled for this post