Truphone punched out an interesting news bite today… they announced that they’ve acquired the business of Sim4Travel. Although Sim4Travel is a publicly traded company in the UK, don’t expect to be buying Truphone stock anytime soon. This is an asset purchase, rather than a merger.
Sim4Travel (for those of us who live outside the UK) is a business selling… you guessed it… cheap roaming for frequent travelers. Pop one of their SIMs in, and you get free inbound calls in 40 odd countries, and you pay 25p per minute to make outbound calls. They’re competitors to folks like United Mobile and Pat Phelan’s Roam4Free MaxRoam.
While I haven’t had a chance to speak with anyone from Truphone, this looks like a sweet deal. When Sim4Travel went public on the OFEX exchange in May of 2006, they traded at 7.5p. Today they closed at a mere .35p. After hours trading dipped to the .20p range presumably as investors digested the news that Sim4Phone is now an empty shell, its assets having been sold. It has been a long and steady decline for Sim4Travel, despite optimistic press releases, and a deal with Carphone Warehouse.
So, why buy them? Well, Truphone CEO James Tagg said: “This completes Truphone’s GSM core network, allowing us to offer global mobile operator services. We’re already enabling customers to make low-cost Wi-Fi calls and soon we’ll be able to provide the added convenience of low-cost GSM calls too, all on a single, worldwide, Truphone SIM.”
The achilles heel of Truphone’s business has been (in my humble opinion) the fact that it was limited to expensive WiFi phones, from Nokia. This step removes that limitation. Now they can sell inexpensive Truphone branded service to anyone. And Tagg says that they will offer those services globally, not just in the UK.
Will Truphone be the world’s GSM and WiFi mobile operator? That would be audacious, now wouldn’t it! Perhaps I can get a company representative to be a guest on the Squawk Box in the near future to answer these and other questions.