Israeli start up Cell Buddy could kill roaming charges

An Israeli startup could end the travails of international travelers who end up footing hundreds or thousands of dollars as roaming charges for cellphone use away from home, Reuters today reported.

The firm, Cell Buddy, has an ingenious approach to the problem aims that enables any smartphone make a local call anywhere in the world, the report said.

Travellers get a choice of calling and data plans with service providers across dozens of countries and as a result, they only pay local rates not the expensive roaming rates charged by their wireless carriers at home.

Cell Buddy's service which opens next year, would allow customers to use a universal SIM card it provides. All travellers have to do is turn on their phones and launch a Cell Buddy app on reaching their destination.

The app serves up details of local carriers and allows comparison of prices, data packages, download speeds and other factors.  A local phone number is assigned to users and they can continue to use their regular phone number back home, at regular prices, using the same sim card.

However, there is one major limitation - Cell Buddy's SIM works only with unlocked phones, which makes it difficult for American travelers whose phones are tied to two-year service contracts, the report said, since these phones are locked and cannot accept other SIM cards.

Further, Verizon and Sprint use the CDMA cellular standard, and some phones would not work with the more common GSM networks elsewhere, it added.

With Cell Buddy's service there is no need to order a roaming plan ahead of time, stand in line at the airport to buy a local SIM card or physically switch the cards. Also it eliminates eliminates roaming charges to the home carrier.

Profit margins on roaming charges are known to be huge and according to Avi Weiss, editor of Israel-based Telecom News, the market amounted to an estimated $50 billion a year.

Although many companies are now offering ways to avoid these, according to Weiss, few customers were aware of their options.

Cell Buddy is not the first company target roaming charges. US carrier T-Mobile, in October, scrapped texting and data fees in over 100 countries and capped charges for many international voice calls at 20 cents a minute, while UK carrier 3 has also introduced caps on roaming charges.

Global SIM cards with pre-paid service are now being offered by several companies, and Canadian company Roamly makes a pay-as-you go SIM card "overlay" which promises savings of over 80 per cent through partnerships with carriers in around 200 countries, the report added.