ZerO1 Sounds Like the MagicJack of Mobile Phones

Startup offers nationwide all-data-and-voice plans for $70 using Internet calling


A startup called Zer01 says it will offer all-you-can-eat voice and data plans on mobile phones for $70 a month -- with no contract. The company is using Internet calling, tapping only the data networks of traditional cellphone companies to deliver voice connections to mobile handsets.

Besides the cheap monthly fee, the company is planning to offer free calls to landlines in 40 other countries for another $10 a month.

The service will first be available to Windows Mobile devices that run on GSM technology. AT&T and T-Mobile are the major U.S. carriers that rely on GSM. After your contract runs out with them, you could easily move your device to Zer01's network. Or the company will sell its own GSM phones.

Zer01 has said it's also developing software for handsets that run Google's Android and RIM's BlackBerry, among others. Jailbroken iPhones may also get to use the service.

The company doesn't tap another carrier's network for anything but a wireless data link to the handset. Voice calls get routed to a private network of Internet backbones and switches for connecting to other mobile or landline carriers.

In that sense, the company sounds a lot like magicJack, which offers a device for connecting conventional phones through a PC and the Internet. MagicJack has its own private network for routing the calls and generally delivers quality that is at least as good as landlines. It's sold more than 2 million of the $40 devices, though the fast growth has contributed to complaints about customer service.

[You can learn more about magicJack in our profile of the company and the nearly 500 comments readers have submitted.]

We'll have to wait and see if Zer01 can deliver good quality over a trickier mobile connection. We'll also have to see what customer support is like.

But it's interesting to see Internet calling coming to handsets that don't require a conventional cell contract, as do Skype and others.