A Vancouver-based mobile upstart is setting its sights on a rapidly growing market: U.S. consumers who want temporary, easily disposed cellphone numbers because they’re using dating websites, selling something online or looking for a job.
Roam Mobility Inc. says its product, called Ready SIM, is the first “self-activating” SIM card for consumer use in the United States. That means consumers can purchase the product anonymously and begin using its prepaid talk, text and data plans just minutes after purchase since the process does not require any paperwork or dealer assistance.
To activate the service, consumers insert the SIM card into their own unlocked handset and text the company a local zip code; they are then assigned a local phone number that lasts for three, seven, 14, or 30 days. After it expires, consumers throw out the card.
Roam, which has a wireless resale agreement with T-Mobile USA Inc., says there is pent-up demand for disposable wireless numbers in the U.S., partly due to the growing popularity of social media sites. Its product is not available in Canada because it has not been able to negotiate an agreement with any of this country’s wireless carriers.
Although similar offerings have existed in Europe for years, the U.S. Federal Communications Commission prohibits the sale of preactivated SIM cards. As a result, U.S. consumers generally require store assistance to obtain a local phone number before they can begin using a wireless service. Roam’s Ready SIM product, however, uses a new technology platform to get around that barrier, while remaining in regulatory compliance.
“We have a customer profile, which is people who don’t want to commit to anything or even share their personal information,” said Emir Aboulhosn, Roam’s founder and senior vice-president of business development.
“Ready SIM was designed for anyone today using Craigslist, social media, job searches, dating sites and others that need to be in touch, while protecting their real phone number. And even businesses who need to provide an instant short-term mobile solution.”
Roam has presold 100,000 Ready SIM units into its distribution channel, which includes a wide range of retailers like gas stations, airports and wireless dealers. The company expects to activate 250,000 SIMs in the U.S. in 2013.
Disposable wireless numbers are sometimes referred to as “burners” since they are also used by cheating spouses and drug dealers. Mr. Aboulhosn acknowledges that market exists, but notes such consumers will always find a way to get around the system.
T-Mobile, like other carriers, is eager to bring new offerings to the U.S. market for prepaid phone services after that no-contract segment began a resurgence this year, especially among middle-class consumers.
Fuelling that trend is the popularity of cheaper smartphones, such as Android-based devices, that make it easier for people to pay upfront for handsets.
Cheaper phones, coupled with flattening growth in the postpaid sector – consumers who pay their wireless bills at the end of the month instead of prepaying for service – are prompting even the two biggest U.S. carriers Verizon Communications Inc. and AT&T Inc. to launch new services in the prepaid space.
“It is what the prepaid consumers are demanding,” said John Weber, associate research analyst with research firm IDC.
IDC is forecasting a compound annual growth rate of 7.4 per cent for the U.S. prepaid market from 2011 to 2016, which would increase the number of those subscribers to 96.2 million from 67.3 million. IDC does not have a comparable forecast for Canada, but a recent CRTC report shows the prepaid market is shrinking, comprising 19 per cent of subscribers in 2011, down from 23 per cent in 2007.
While Mr. Aboulhosn thinks Canadians would also benefit from the Ready SIM product, he says Canadian carriers are less eager to sign resale agreements with mobile virtual network operators like Roam, which offer niche services by leasing space on an existing carrier’s network. “I can’t answer on what it would take to get them to do it, because they act and are seen as an oligopoly.”