Finnish app for best call-plan to launch in U.S.

Reuters News
Posted: Nov 13, 2012 8:04 PM

By Tarmo Virki

HELSINKI (Reuters) - Finnish startup Alekstra will launch this month in the United States its iPhone application, which picks the best call-plan based on consumers' billing history, and could dent profitability of iPhone users for the carriers.

It has tried the Ratemizer app in Finland since last month, with a few thousand users finding that they overpaying on average by 35 percent as they usually underestimate call volume and overestimate texting volume.

"Many consumers calibrate their mobile plans for their median monthly voice minute volume. However, they tend to have 2-3 peak months with far higher volume - and this typically leads to stiff overage fees," said Alekstra's founder Toni Toikka.

Texting volume has declined on average by 14 percent over last 10 months as the amount of iPhones has increased in the homeland of Nokia, former smartphone market leader, and traffic is redirected to Apple's own iMessage system.

"One surprise to us has been how much certain consumers overestimate their SMS and mobile data usage," said Toikka, adding many consumers were likely increasingly using local WiFi networks, which has left them with outsized data plans.

Consumers have to log in to their carrier portal through the app, which then analyzes the last 12 months billing data and picks the best among hundreds of possible mobile plans.

In Finland, most consumers can reach more than 15 percent savings by changing plans within their current carrier, even though the cheapest plan is usually with a rival operator.

Alekstra has said it plans to step up its challenge to traditional operators in 2014 by launching a mobile virtual network business, offering calling services without roaming fees in key markets around the globe.

Before its launch, it aims to raise some tens of millions of euros from venture capital firms.

As a virtual operator, it will rent airtime from existing networks, but the investment needed is a fraction of what global incumbents like Vodafone or Telefonica have invested in building out networks from scratch.

(Reporting by Tarmo Virki; Editing by Marguerita Choy)