Polar Wireless Business Model Looks Promising - Analyst Blog

Polar Wireless Business Model Looks Promising

Ken Nagy, CFA

Polar Wireless (BCDI) 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. We feel the firm is in the sweet spot of this high growth area.  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 at some point.  Our rating remains neutral.


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 current mobile 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.

Polar's micro SIM is less than .45mm thick, and slides behind the primary SIM. The chip enables subscribers to travel the world and take advantage of affordable rates along with free incoming calls in over 40 countries. Every call becomes local.

We feel the key is that consumer behavior does not have to change. Customers will continue dialing directly with the cell phone as they usually do. No need to change the user habit, no need to learn new buttons and menus, no need to dial local access numbers and pin codes. According to the number dialed, Polar Wireless will choose the most cost effective voice route to place the call through.
 

Once it is in, How Does it Work?
The Customer dials the number (or selects it from contact / recent calls list) on his cell phone. Polar Wireless recognizes the call placed and automatically sends an electronic order over GPRS or SMS to the switching system. In about a second, Polar Wireless connects the customer to the destination. This gives users a full mobile service (voice, SMS, MMS, data) along with savings of 60% - 80% while roaming.
 

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