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IP2 eyes low-cost mobile service for developing countries

The U.K.-based company plans to launch a cellular service based on the concept of the virtual provider, with handsets smaller than a credit card.

This Roamobi handset is smaller than a credit card.

Correction at 10:01 a.m. PDT December 7: VMSP licenses will be sold at $41,200.

How will demand for mobile technology play out in developing countries? Mike Kellett and Joe Morgan are tackling this issue as they prepare to launch their global mobile platform at CES 2010.

Although their joint venture, IP2, isn't the first company to address the need for low-cost international cellular service, it's taking a different approach. "We have a system that doesn't depend on government intervention," says Mike Kellett, co-founder of IP2, based in the U.K.

IP2 will launch a cellular service based on the concept of VMSP, or virtual mobile service provider. Anyone can start a VMSP and sell services and handsets. Usually, a license to operate as a local mobile service provider can cost up to $5 million, but IP2 will be selling VMSP licenses for only $41,200.

The handsets provided by IP2, which are smaller than a credit card, will be priced at $25. Communication between subscribers will be free, along with incoming calls in more than 50 countries. Short codes, text messages, and voicemail retrieval will all function in IP2's internationally based mobile service.

"We want to empower local companies to become VMSPs," Kellett said. "We feel that this will be supported by NGOs and local government, allowing them to become local players in the mobile industry."

Participating NGOs might loan a local enough money to purchase phones and prepaid minutes to become a micro-dealer. Locals who wish to subscribe to the service would contact a dealer or a micro-dealer to obtain a phone and SIM card.

"We'd like to step backwards to the ordinary man who has no means to sell but face-to-face."
Mike Kellett, IP2

The service would be marketed by word of mouth, as selling the phone service on the Internet eliminates the opportunity for locals to financially benefit from the program, Kellett explained. "We'd like to step backwards to the ordinary man who has no means to sell but face-to-face."

Micro-dealers will manage their business through a text messaging system. Sending a message to an IP2 short code would engage them in an automated dialogue, allowing them to view their balance or transfer money, for example.

IP2's cellular service vies to connect developing and developed countries. Kellett suggests that refugees attempting to contact relatives or small companies making worldwide business deals will benefit from an international service that doesn't charge for roaming and works on a prepaid model.

Contemporary services like 3G, 4G, and Wi-Fi aren't available in developing countries, as most still run on GSM and 2.5G networks. "Our product allows anybody in the developing world with an old phone to have international mobile service," Kellett said.

After 10 years of research and development, Kellett and Morgan will launch the IP2 product under the brand Roamobi. At launch, the service will readily support millions of international subscribers.