Flexiroam spearheads cost saving microchip into China

Flexiroam ASX FRX Ommur Intelligent Technology China microchip sim

Mobile virtual network operator Flexiroam (ASX: FRX) has signed a distribution partnership with Ommur Intelligent Technology, which will see Chinese-based company distributing its novel Flexiroam X attachable microchip across the Chinese mainland.

The deal is a significant milestone as it marks the company’s first step into the vast Chinese market.

Flexiroam has said that the agreement is initially focusing on Shenzhen in China’s south but will likely be expanded to other regions in China over the coming 12 months.

Flexiroam X is an ultra-thin microchip technology that attaches to a user’s existing SIM which provides easy and secure data access. Users are able to superimpose a “microchip sticker” on top of their existing SIM card and thereby access cheaper internet access while travelling overseas.

The technology promises to shake up the existing status-quo of high roaming charges being levied by oligopolistic telecommunications providers in both China and elsewhere around the world. Consequently, Flexiroam X also removes the need for customers to purchase multiple SIM cards when travelling.

The European Union was one of the first areas to see roaming charges scrapped in a highly contentious vote last year, but telcos have responded by lifting subscription charges and levying fees for other supplementary services in a bid to recover lost revenue.

Flexiroam could potentially alleviate such wrangling – and is seeking to do is amongst one of the fastest growing tourism markets in the world: China.

Commercialising Chinese tourists

According to analysts, China has become the largest internet market in the world that currently has 772 million internet users with mobile internet users accounting for a whopping 97.5%.

In recent years, China’s tourism has soared, with Chinese residents making over 130 million overseas trips in 2017 alone. In the same year, China spent USD$258 billion on tourism expenditure, making Chinese tourists some of the biggest spenders worldwide.

Ommur specialises in promoting industrial development and has been involved in a variety of industries, including security, communications, transportation and medical care.

One of its key future markets is “intelligent hardware and robotics” with the today’s deal confirming that Ommur has committed to a minimum purchase of US$50,000 worth of Flexiroam X microchips, to be distributed through the company’s physical outlets in Shenzhen. Ommur will also distribute Flexiroam X microchips through strategies that include a “dedicated website for online sales, partnerships with Chinese airport retailers and travel agencies,” the company said.

Through this partnership, Flexiroam intends to gain a foothold in China’s thriving tourism industry, as the added accessibility through a local partner is expected to motivate Chinese residents to switch to the Flexiroam X microchip during their travels.

Payments bliss

China also happens to be the current global leader in introducing consumer-favourite services such as online payments that continue to erode banking influence in Asia.

The use of digital payment solutions such as Alipay and WeChat Pay surged in volume in 2017 with over 500 million people using mobile payment transactions every year.

In China, Alibaba and WeChat have sprung up to challenge the traditional state-backed behemoths such as Bank of China and China Construction Bank, having grabbed an 80% market share in online payments already. Figures show that Alibaba’s Alipay and WeChat Pay processed US$3 trillion in 2016.

The global connectivity offered by Flexiroam X will enable Chinese travellers to continue to use their preferred digital payment solutions internationally, thereby providing them with even greater convenience while travelling.

“We are very excited to be entering the China market as it is a huge market that is also very receptive to new technology. The China market offers many opportunities for Flexiroam to expand as it has a booming travel industry and the Chinese are highly dependent on mobile data to make online payments and stay connected via WeChat online,” said Mr Jef Ong, managing director of Flexiroam.

George is an award-winning market analyst who has authored articles and editorial opinion pieces for multiple publications around the world. He has written about a wide variety of topics including financial markets, stocks, trading, politics and economics.