Millions of taxpayer euros and many years later, magic start-up not on market yet

Photo: Internet

Having secured over €2.5m from Enterprise Estonia four years ago, the start-up claims to have completed the promised technology called MagicSIM. Alas, the masses are still waiting.

We are talking about MeraTel, at Liimi St 11, Tallinn, a customer of Enterprise Estonia (EAS) since June 2011. According to EAS communication chief Katrina Loi, the company applied for research and development support for a process-oriented project named  «The project of UNIVERSAL INTERNATIONAL SIM-CARD Magic SIM».

The mystically christened project with overall cost of a whopping €6,744,500 asked for €2,360,500 extra i.e. 34.99 percent of sum total. The starting date was July 2011 and the MagicSIM technology was supposed to be completed by December 31st 2012.

As, according to documents presented to EAS, the activities of the fun-sounding project have been carried out and the technology developed, we thought to ask the company what the SIM is all about and how do we use it.  

Turns out the company intended to use the EAS millions to make a product for Russian and Ukrainian markets mainly. Pursuant to the project, it is supposed to be a universal prepaid SIM card, allowing use of mobile communication services in various countries using local tariffs.

«At the beginning of the project, Ukraine and Russia were foreseen as main markets for the entire project,» MeraTel chief Igor Nikulin told Postimees, immediately adding that the project is regrettably halted in Russia due to sanctions.

Regarding Ukraine, the company has better hopes:  «Despite force majeure, the project is advancing over there, but not as fast as we wanted, and is in need of additional financing by us.»

Mr Nikulin said a company called ВІВЕКС УКРАЇНА was established for operations in Ukraine, and negotiations are underway with mobile operator PEOPLENET. Now, MeraTel hopes that the technology created by Estonian taxpayer money will be applied there as soon as end of this year.

Mr Nikulin said that the European Union – where, as we know, roaming fees will disappear in 2017 – has never been primary market for the company.  

Despite not having reached consumers during the years, MagicSIM secured another cash injection from EAS in 2013. This time, it was €189,000 to market a product called MagicSIM. As at today, €154,000 of that has been handed out and EAS affirms that the total marketing project costs amount to €378,000.

Katrina Loi says EAS has also audited the project and, at the moment, faults have not been found. Thus, on paper all is okay.

«As a rule, support is paid out after the costs have been accrued, and not as advance payment, and during the audit documents presented for the payments and adherence to procedural rules are inspected,» added Ms Loi. According to her, there has thus far been no basis to doubt the reality of own financing by OÜ MeraTel.

Igor Nikulin added that Meratel OÜ is a producer of a GSM-platform and is mainly involved in licensing – he is not personally involved with the end customers.

However, he said such projects as optiroam.com and vivexmobile.com have been produced on basis of the platform. As shown by queries in public databases, the owners of companies behind these projects do at least partially coincide with those of  MeraTel.