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Zer01: Legitimate Operator Or Bad Joke?
New well-hyped operation has a light, fishy smell...

As we noted earlier this month, a new company by the name of Zer01 has been getting a lot of attention for their promise of unlimited voice and data on smart phones for $69.95/month. There's quite a few (huge) catches, including the fact that the voice component is really VoIP with Zer01 operating as a mobile virtual network enabler (MVNE) -- who delivers service and phones to mobile virtual network operators (MVNO). Of course when the service "launched" on July 1, it was interesting to see the company hadn't signed up a single MVNO partner.

We’re pretty much completely helpless from our standpoint.
-Zer01's CEO Ben Piilani, on the ludicrous marketing claims circulating about the company's product.
This week finds Nancy Gohring at Computerworld pens a piece that notes how Zer01 has all the tell-tale signs of an MLM and pyramid scheme, with no substantive product to speak of, vague and inconsistent technical specifics, all operated by a MLM marketing man named Mark Petschel -- currently on probation after pleading guilty to securities fraud. Gohrig notes that the parent company of Zer01, UTG, also gives off a rather fishy smell:
quote:
For instance, UTG lists its head office under "Illinois offices," but provides an address for that headquarters in Creve Coeur, without noting the state. Creve Coeur is a suburb of St. Louis, Missouri. The leasing agent for that office building has no record of UTG at the location. A group that rents space in the building to small businesses said that UTG may have used space there in the past, but doesn’t currently.
Gohring gets attacked in the Computerworld comment section for not giving the company a chance, several angry posters insisting that many legitimate companies originate with floating headquarters, limited product, and executives with suspect histories. But Derek Kerton, who interviewed Zer01 management recently at CTIA, also has his doubts after seeing a product that technically was little more than shiny GUI.
quote:
I've seen all forms of wacky claims made by Zer01 re-sellers while researching this post. I've read how it roams from AT&T, to T-Mobile, to Rogers, to TELUS (with no mention of the fact that TELUS uses CDMA networks not supported by the phones they offer). I've read that it will work in airplanes, that "it's got the 2100MHz speed," that you can download a movie to your laptop in 3 minutes, that it includes SMS MasterCard mobile payment, and that it uses "the proprietary patented technology that Zer01 has that allows your phone to switch from GSM, Tri-Band, Quad-Band, Wi-Fi to connect to the VoIP," that it's 4G, that it's 5G and that it offers 20Gbps on a private FTC-licensed 2100MHz network. The claims range from the improbable to the technologically incoherent or both.
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But Laptop Magazine, who praised Zer01 at CTIA, gives Zer01's CEO Ben Piilani a chance to defend himself. According to Piilani, when he found out about Petschel's securities fraud conviction, he managed to get him to step down as Global Verge CEO. He insists usable product will be in journalist hands "within weeks," and blames MLM partners for essentially everything that's gone wrong:
quote:
What happened was [[Buzzirk’s]] base grew too fast I guess and they didn’t have their compliance in place and so their agents… it’s one of those things you tell one person and by the time it gets down the chain it’s a totally different story. And they just started marketing that stuff. So according to our agreement they weren’t allowed to put out any public materials without passing it through us first.
Right after blaming his MLM partners, Piilani says he'll keep right on doing business with them. The evidence so far suggests that Zer01 is little more than MLM vaporware being lorded over by MLM outfits Buzzirk and Global Verge, netting a few ambitious but amoral gentlemen a nice payday before the operation flames out spectacularly or whimpers through a largely irrelevant lifecyle. If Zer01 is legitimate, they're going to need substantially more than shiny baubles and a non-existent product to do battle with the AT&T and Verizons of the telecom universe.