Mint goes roaming to cut mobile call charges

Talk costs, they say in the mobile phone industry. Take the two minute phone call from Spain to Switzerland on Telefonica's network charged at a rate of £19 a minute. Or ring for a taxi in Hungary on consecutive days at the same hour and find the international roaming charge of the call has swung from £2 a minute on the first occasion to £4 a minute the next.

With business going global, mobile phone costs are spiralling and one British company hopes to cut through the apparently arbitrary charges that mobile users encounter when they leave Britain. Mint Telecom, a small "virtual operator", hopes to hit the big time with its launch of a pre-paid global roaming service at a flat-rate fee of 85p a minute anywhere in the world.

Adrian Wood, Mint Telecom director, said the mobile user is often unaware of the high costs of internationally roaming until they return to Britain and receive a copy of their bill.

Charges for international roaming usually cannot be controlled by any of Britain's four operators - Vodafone, Orange, One2One or BT Cellnet - and if a mobile phone user has a dispute with the charge they have to take it up with the foreign mobile network operator.

"There's a tremendous move, we have found, in large corporations and in the medium-size business market to try and arrest these costs," Mr Wood said.

"We are very confident that we will achieve 400,000 subscribers across Europe in our first year."

Mint Telecom claims it can save corporations up to 40% on international roaming charges on a monthly mobile phone bill.

The London-based company is able to offer its cheap flat rate of 85p a minute because it has bought bulk airtime from 200 network operators globally and has coverage in 115 countries.

Mint Telecom charges a flat 42.5p fee for mobile users when they are receiving calls outside their home country.

The company has agreements, lasting up to 20 years, with those operators and has made its first bulk purchase of 155m minutes which it expects to last for three months. Once its subscriber base grows, it intends to boost this level of buying to 200m minutes a month.

Mr Wood said the most popular part of Mint Telecom's service would be the pre-paid el ement so that large businesses know what they are paying for up front.

In the British retail mobile market there are about 15m users on pre-paid contracts.

The margin that Mint Telecom would make from its flat-rate fee was slim, Mr Wood said. A mobile user wanting to use the network would insert a Mint Telecom SIM card into their mobile phone before heading overseas.

The user would then be roaming on the Mint network and could make a call which would be routed through one of its switching stations in either Switzerland or Iceland that allows for the distribution of its service.

Mint Telecom owns 50% of the third GSM licence in Ice land and also offers its own portal for WAP-enabled phones. The portal delivers content to its users such as email, share prices, news, weather and sport.

The company, which is owned by six private investors, is capitalised at about £5m.

The owners say they have pumped tens of millions into the company over the past four years, refusing to be specific as to the exact level of investment, however, because of confidentiality agreements.

They are seeking a further $18m (£12m) to $20m in the next three months from venture capitalists to develop further the infrastructure, sales team and web portal as it expands.

The company employs 22 sales staff and has distribution agreements with telecoms operators globally to promote its service, having linked with European Telecom in Britain.

Mint Telecom's success may well, however, depend on whether its prospective business customers accept the idea and marketing that its service is "a fresh and new approach" to mobile usage.