Sandeep Panesar doesn’t see why North Americans should have to pay more than $10 a month for a basic cellphone package.
The CEO of Vancouver’s Teliphone Navigata-Westel also doesn’t see why he needs cellphone towers to provide mobile services when the newest entrant to the wireless game launches in October.
“Mobile is the future,” Panesar said. “We believe our SoIP [smartphone-over-Internet protocol] service is the future of mobile communications.”
Teliphone users will have to insert a subscriber identity module (SIM) card into an unlocked smartphone and run an app to gain access to calling, messaging and data services over Wi-Fi. Teliphone has also partnered with a Canadian and a U.S. wireless provider to transfer calls or messages to a cell tower if a customer leaves a Wi-Fi hot spot, Panesar said.
Telecom expert Ben Levitan, who has provided testimony in U.S. court cases, said the service is similar to that of Virgin Mobile.
Virgin doesn’t own any cellular infrastructure but buys minutes and data from Bell (TSX:BCE) at wholesale. Bell then handles the calls and data usage over its own towers and network.
Levitan said the tricky part for Teliphone comes with its promise that customers can use any unlocked phone.
Telus (TSX:T), for instance, will unlock its devices. But if another carrier’s SIM card is inserted, data services may not work since they were originally configured for Telus’ network.
“It’s nothing revolutionary or alternative, but from a business point of view, it may be a clever idea,” Levitan said.
Teliphone’s SIM cards begin printing in late August, and the provider aims to mail one million free ones across Canada and the U.S. by the year’s end.
“Our focus will be here at home to start,” Panesar said, adding Teliphone will still accept U.S. customers.
Teliphone’s patent-pending technology didn’t exist five years ago, which meant the only way to get into the wireless game was to build towers.
“Even six months ago, the regulatory space wasn’t right for something like this,” Panesar said, noting Ottawa has implemented more consumer-focused rules allowing smaller companies to run on the networks of larger providers.
Comunicano CEO Andy Abramson, who previously worked for Vancouver’s voice-over-Internet protocol provider CounterPath, said the rise of so-called Long-Term Evolution (LTE) networks has made this type of service possible only very recently.
The LTE networks are faster and less error-prone and have more capacity for data traffic compared with 3G networks.
“VoLTE [voice over LTE] is coming, and already companies like Verizon are in deep trials with it and T-Mobile is using it when someone is on their LTE network,” Abramson said.
“What [Teliphone] is doing is basically VoLTE but they are not calling it that as they may be doing things slightly differently to achieve the same outcome.”
Panesar would not reveal which wireless provider Teliphone partnered with to gain access to cell towers. But in March, Rogers (TSX:RCI.B) announced it would be the first of Canada’s big three carriers to offer VoLTE services.
So while it’s new to Canada, such services are becoming more common in the U.S., with players such as Republic Wireless, FreedomPop and Scratch Wireless already operating.
Meanwhile, Google’s (Nasdaq:GOOG) Project Fi is offering users basic packages at US$20 a month, which includes one gigabyte of data and unlimited messaging. Teliphone’s $10 monthly package starts with 100 megabytes.