Among Telecom Giants - TheStreet

Among Telecom Giants

One small but growing company is offering the capability for cheap international calls.
Author:
Publish date:

Jenny Fielding formed a small business -- Switch-Mobile -- out of necessity. Calling her boyfriend in Germany from New York City on her mobile phone cost her upwards of $500 a month.

Like many entrepreneurs, Fielding sought a creative solution, in this case, a way to make international cell-phone calls cheaply.

Along with partners Sean Sealey and Mikael Breinholst, she founded Switch-Mobile in 2005, and Globe Dialer, the firm's software application, went live in the summer of 2006.

"Our costs are about 90% lower than international calls placed on traditional mobile phone calls," says Fielding. For example, a call through a

T-Mobile

handset to someone in London will cost about $1.50 a minute, whereas one using Globe Dialer software will cost just 3 ½ cents a minute.

The service is compatible with all Java-enabled cell phones, including those from

Motorola

(MOT)

,

Nokia

(NOK) - Get Report

and

Samsung

. Switch-Mobile partners with different telecom carriers around the world to offer minutes to its customers at the lowest rates possible.

The Globe Dialer software works by downloading an application onto the client's mobile phone. All the user's calls are placed to a local number and are then automatically rerouted through Switch-Mobile's network to its destination country. This lets the cell phone user avoid long-distance rates on calls. The process is seamless and takes place as soon as the caller presses the send button.

Switch-Mobile is up against much competition, notably other inexpensive VoIP services like

Skype. It stands out, however, as Skype is primarily available for callers though a computer and is significantly more expensive if that call is placed to a phone and not another computer. Even with today's ultralight laptops, it can be difficult to have an intimate conversation when using them.

Calling cards also pale in comparison, as they often charge connection fees (even disconnection fees, for some) or in blocks of time, such as four-minute increments. Globe Dialer bills users by the second instead of by the minute, which is unusual in the telecom industry.

Like many small businesses, word of mouth was crucial to Switch-Mobile's early growth. An article on trend-watching site

Daily Candy last summer attracted several thousand clients. "If there's something good out there, the word gets around," says Fielding. The company has also been featured in blogs, including a sidebar conversation of

New York Times

tech writer

David Pogue's blog.

Switch-Mobile only signed onto work with a public relations company three months ago.

Clearly, the service is working; projected revenue for 2007 is $1.5 million. Globe Dialer has wide appeal across several demographics: business users, immigrants who want to stay in touch with friends and family and who may not have a computer or a landline, and people living in the U.S. temporarily.

Outsourcing serves as another way to keep costs down for Switch-Mobile's programmers and customer-service center. "I did look at some teams in India, where it would be less expensive, but we decided on a group in Denmark," says Fielding, which is where her partners are located. This gives them the chance to keep a close watch on all operations.

Not surprisingly, it cost a significant amount for Switch-Mobile to start up within such a massive industry -- a few hundred thousand dollars. This included expenses from the complicated billing system (which allows users to see in real time how much they're charged for a call), programmers and customer service.

Dial It Up

With a background in law, Fielding focuses on all the legal matters, including the firm's business development initiatives, legal affairs and strategic partnerships.

Sealey handles strategy and coordination between technology partners, handset capability and Web site and billing interface. Breinholst manages the financial aspects, investor relations and marketing.

Fielding, who also previously worked at an investment bank, doesn't have extensive experience in technology but is excited about the field. "I am one of those people who likes a challenge and learning about a new industry," she says.

It's still a group effort, though: "We decide on what makes the most sense by asking ourselves questions such as do we want to spend money updating to a new handset, or on developing new technology

like checking the account balance from the handset," Fielding explains.

Switch-Mobile will be expanding in the next few months through blanketing Europe. By the end of the summer, the service will be in every country there. This will give users -- and businesses -- who work in Europe even more accessibility worldwide.

Even though the company is growing, it's still a big change from Fielding's previous jobs. "It's a lot more accountability when it's your own company; the day never ends. People call you all times of the day and night," says Fielding. However, a small business also has its unique rewards. "It's a hundred times more fun and any deal you close, you feel very good about it in a different way," she adds.