ZipTel takes on telco giants

Subiaco-based ZipTel is gearing up to compete with a number of major telecommunications companies as it prepares to launch its internet-based communications app.

After months of testing, ZipTel will release its ZipT app in December, and is aiming for more than 1 million downloads during the first six months.

The app is similar to Viber in that it allows users to communicate for free using internet protocol as opposed to traditional telecommunications connections.

Cyprus-based Viber was bought by Japanese internet company Rakuten for $US900 million in February.

Rakuten also owns e-reader company Kobo and was founded by Japan’s fourth richest man, Hiroshi Makitani.

In a recent announcement, ZipTel claimed its product was superior to its competitors.

“It has the ability to deliver superior crystal clear call quality in 2G and low bandwidth data environments globally where current applications on the market are unable to operate,” the company said.

ZipTel said the app could be used in low bandwidth environments with speeds at only 8kps (about 80 per cent slower than telephone-based dial-up internet) and used 80 per cent less data than competing applications.

ZipTel went public in June through a reverse takeover of Skywards Limited, which had been focused on the manufacture and sale of sports merchandise.

The promising results from ZipT testing excited the market, with ZipTel’s shares reaching more than double their listed price at one point last week.

The company listed with a market capitalisation of $8.4 million. Initial caution led to $2 million being wiped off the market capitalisation as share value dropped to 15 cents each.

However, a flurry of excitement last week pushed ZipTel’s market cap to $19.3 million shares reaching 45 cents each.

ZipTel has struck two separate agreements to help in the distribution of the ZipT app.

One, with Zhenya Tsvetnenko’s Mpire Media, will deliver access to millions of Mpire customers across 120 countries.

ZipTel was formerly named AussieSim, after its flagship pre-paid travel sim card.

ZipTel chief executive Bert Mondello said sales of AussieSim were pleasing and a new distribution agreement with travel company Trafalgar would cement that.

A total of 1,440 sim card sales were generated for the month of June 2014.