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South African born billionaire Natie Kirsh is the world’s 435th wealthiest person globally, according to the 2015 Forbes list, and worth $5.7 billion according to Bloomberg Billionaire’s Index. His property empire spans from Swaziland, Australia to the United Kingdom and he was once quoted as saying, “real estate is the only sector where ‘stupid people’ can make money.” Kirsh has invested outside of property, creating a successful perishable goods distributor in the United States but his latest investment steps into tech and seeks to ease high-cost roaming problems experienced by travellers. It’s a Toronto-based tech startup KnowRoaming, run by two South Africans Gregory Gundelfinger and Mathew Stein, and is set to offer ‘the cheapest fees in 200 countries’. High phone bills are a problem many South African travellers have to contend with. – Stuart Lowman
By Colin McClelland
(Bloomberg) — Riaan Momberg, a manager in the South African travel industry, mistakenly switched on his mobile phone data for just one day while in Sydney last year. His phone company charged him about $500.
The operator sent messages warning of usage amounts, “but I was asleep by then,” Momberg, 43, said in an interview in Johannesburg. “I’ve certainly learned my lesson.”
His experience was typical of the shock that increasing numbers of travelers and businesses experience when they are charged hundreds of dollars for using their phones abroad to locate restaurants or watch YouTube content.
Enter billionaire Natie Kirsh, who’s backing a quick fix by Toronto-based tech startup KnowRoaming Ltd. to offer what it says are the cheapest fees in 200 countries. Customers can save as much as 85 percent on roaming charges through deals with local mobile networks by slapping an electrode-studded sticker on their SIM card that forwards calls to a home-country number, according to the company.
“I immediately identified with the opportunity,” Kirsh, the South African owner of Jetro Holdings Inc., a restaurant supplier that’s among the largest perishable goods distributors in the U.S., said by e-mail. “The investment met all the criteria I look for and in that meeting I agreed to give them seed and growth funding.”
Kirsh, 84, paid an undisclosed amount for a 50 percent stake in KnowRoaming, with the rest owned by management of the company, which is still to make a profit. Kirsh lost most of a retail fortune in the 1980s before moving to New York where he expanded Jetro and is now worth $5.7 billion, according to the Bloomberg Billionaire’s Index.
KnowRoaming Chief Executive Officer Gregory Gundelfinger and his cousin, Mathew Stein, both 32-year-old South Africans, developed the concept in Canada, where operators charge some of the world’s most expensive mobile phone fees, according to the Organization of Economic Cooperation and Development. The unit costs $30 online, including $10 air time and free shipping to most places, Gundelfinger said. There’s also an $8 a day unlimited data plan.
“Our agreements can be used to connect any kind of device,” Gundelfinger, who has a South African law degree, said in an interview in Johannesburg. “We’re perfectly positioned to enable the new devices coming online for the Internet of Things,” he said, referring to using handsets to control systems such as home air conditioning.
The company is working with a manufacturer to embed the technology in new handsets that will first appear at the Mobile World Congress in Barcelona on Feb. 22, he said. The concept can’t be contained in a software application because it has to be integrated with hardware, Gundelfinger said. He wouldn’t identify the maker because of a confidentiality agreement.
New regulation may erode the need for KnowRoaming’s technology as Europe targets mid-2017 to eliminate roaming charges, while several African countries met last year to discuss harmonizing fees. Operators such as Hutchison Whampoa Ltd. unit Three in the U.K., T-Mobile US Inc. and Vodaphone Group Plc offer reduced-cost roaming packages, according to Tim Miller, a partner at London-based Plum Consulting LLP.
“I’m not sure that we will ever get to the point where roaming is at exactly the same price as home tariffs,” Miller said by e-mail, citing routing expenses. “But the overall cost is certainly decreasing.”
A big part of KnowRoaming’s marketing strategy is to target so-called silent roamers, travelers that simply switch off their phones because they’ve been stung by roaming charges, Gundelfinger said. They instead use wifi or local SIM cards when abroad, he said.
KnowRoaming was set up in Toronto, where Stein obtained a computer engineering degree at York University and drew on a network of technicians after working at nearby Evertz Microsystems Ltd., a manufacturer of broadcast equipment. The Canadian government’s Scientific Research and Experimental Development program kicked in 70 percent of salaries for engineers and 40 percent of capital expenditures when the company started in 2012, CEO Gundelfinger said.
“That was a big motivator for us,” he said. “Mathew had a team ready to go and now we have 70 employees.”
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