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Zer01 service still vapor, distributors empty-handed

By Nancy Gohring
August 10, 2009 10:31 AM ET

IDG News Service - Further delays and leadership changes have pushed out the launch of Zer01's "unlimited everything" mobile phone service, casting further doubt about whether it will see the light of day.

IDG News Service recently questioned whether the unlimited mobile voice and data service that Zer01 had advertised could actually be delivered as described. The service, originally targeted for a July 1 launch, is not available yet.

Zer01's service is being marketed through a multilevel marketing program run by a company called Global Verge. That company has had its own share of problems in the wake of CEO Mark Petschel stepping down after it was revealed he is on probation for a securities fraud conviction. He remains chairman of Global Verge.

Now there are more leadership changes. A month after saying they had been put in charge, some other Global Verge executives said last week that they have been dismissed. Each has a history of working with marketing companies that have come under fire for questionable practices.

In recent weeks the executives had delivered sometimes conflicting reasons for why the service has yet to launch. One now says he doubts that sales people will receive commissions or that the service will launch at all.

Even before the most recent changes, some onlookers began having second thoughts about the mobile service, despite the early accolades it won.

Last Tuesday, for instance, Laptop magazine rescinded an award it offered to Zer01 earlier this year for having the best product at the CTIA wireless conference. "We're taking this extraordinary step because of serious ethical questions that have arisen about the company. We can no longer endorse its service and therefore are compelled to warn our readers to avoid it," the magazine wrote in a blog post.

Zer01, the supplier of the service that would cost end users $70 per month for true unlimited mobile voice and data services, is still touting the award on its Web site.

Gartner analyst Tole Hart, who was once keen on Zer01's concept, is now suspicious about whether the company can do what it promises. That's partly because while Zer01 claims to have partnerships that give it nationwide coverage using GSM (Global System for Mobile Communications) technology, neither of the nationwide GSM operators say they are working with Zer01.

In addition, he wonders, "why would they let someone come on their network and undercut them?" Zer01's unlimited offering would cost less than that of many of the operators, which also typically impose a cap on data usage.

Some observers allow that Zer01 may have developed a new type of technology that could enable its unlimited offering. Zer01 claims to have applied for a patent that "allows each smart phone user to make voice calls or transmit data by sending voice communications through a VoIP system." The patent number is in the format of a provisional application and those are not publically available, according to the patent office.

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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