Polar Wireless (BCDI) Battles Roaming Charges - Analyst Blog

Ken Nagy, CFA

Polar Wireless (BCDI) Battles Roaming Charges

Combine the growth in mobile phones with the number of people and businesses crossing borders (company estimates 800 million, 300 million cell users) and the potential of a roaming charge solution becomes apparent. The global roaming market according to market research firm Informa, is estimated to be a $23 billion dollar worldwide market, with 300 million roamers using approximately 22 billion calling minutes. This market is set to grow 70 billion minutes likely handcuffing international business travelers, long distance callers, international students and foreign nationals.

Polar Wireless is a mobile virtual network operator (MVNO), which intends to monetize its proprietary technology. The firm's SIM cards work in conjunction with current providers to eliminate roaming charges without the hassle of changing phone numbers or customer behavior. Fast growing mobile phone technology combined with the uptick in global travel has made the world a very small space, however high costs and hassles still exist.

Eliminating Roaming
This solution requires an easy, one-time insertion of a micro thin wafer SIM (the "Global Key") between the carrier SIM and the handset. The Global Key is invisible while the user is in the home market and only activates when the user travels outside the home network. While outside the home network, the Global Key activates, allowing friends, family and associates to call the home number which will ring customers wherever they are in the world. Additionally, the traveling customer can seamlessly make and receive calls in every country without paying his or her mobile operator back home. In effect, every use of the customer's mobile device outside the home network becomes local.

We like the firm's business model, yet caution investors the firm is in cash burn mode and will most likely have to do a capital raising event soon. Our rating is Neutral.

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