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To successfully provide a multi-service product globally is complex, from technical and usability perspectives, and requires diligent attention to many aspects. Moreover, the technical and usability requirements are only two of many other requirements that must be correctly attended to and structured.

These other requirements include legal, regulatory, compliance, jurisdictional, organizational, contractual, structural and many other requirements; all of which must be correctly attended to and structured. – for itself and the Affiliates (VSMPs) that form part of the Group – had many such requirements that had to be attended to on the Critical Path to success. To ensure that these aspects had been attended to correctly, underwent some of the most rigorous Due Diligence that has ever been applied to any company worldwide.

During these multiple Due Diligences, legal experts and sector experts examined, in detail, every one of these aspects, to ensure’s and its VSMPs’ full compliance with all Legal, Regulatory, Due Diligence, Compliance and Best Practice requirements; as well as multiple other requirements.

In all these multiple Due Diligences,’s Global Service Offering was found to be satisfactory in all respects, and to comply with all requirements.

Summarized confirmations of these Due Diligences can be seen in the video and two documents here below: 

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Frost & Sullivan is one of the world’s Premier international consultancies. Its Information and Communication Technologies (ICT) Practice has over 1 100 Analysts, who are Country Experts and Sector Experts in their respective fields. Their analysts’ specialist fields include legal, regulatory, compliance, structural, technology, telecommunications, finance, business, management and other sectors.

Frost & Sullivan’s Global ICT Practice conducted thorough Due Diligence on all aspects of’s system, service and product globally – in North America, South America, Europe, Africa and the Middle East and in Asia; twice.

The conclusions of these two global Due Diligence exercises can be heard in the video below, as confirmed by the Global Vice-President of Frost & Sullivan’s Global ICT Practice: 

Click here to play the video

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Other than the two thorough Global Due Diligences by the Global ICT Practice of Frost & Sullivan, also underwent rigorous and detailed Due Diligence over a six-month period by personnel and teams from seven firms of attorneys in multiple countries.

The international Legal Due Diligence re-examined many of the aspects that had been examined by the Frost & Sullivan Global ICT Practice such as legal, regulatory, compliance and jurisdictional due diligence; as well as additional due diligence on multiple other aspects, including legal corporate structuring, personal due diligence on management personnel, e-commerce and payments processes, EULA and other agreements, corporate administration and many other aspects.

The result of the Legal Due Diligence was favorable to the extent that it supported’s application to the United Kingdom Listing Authority (UKLA – a Division of the Financial Conduct Authority) for eligibility for to carry out a Standard Listing on the Main Board of the London Stock Exchange. Although eligibility was granted, elected not to proceed with a listing at that time, instead utilizing private capital to expand.

A letter illustrating the summarized results of the Legal Due Diligence can be seen by clicking this link. The contents of the original letter are reproduced below: 

Dear Stuart

Regarding the abovementioned, and your request for confirmation, I provide the following:

  1. As a senior partner in the London office of Fasken Martineau LLP, I led a team of six experienced English business lawyers who over a period of several months carried out a rigorous due diligence exercise into the legal aspects of the business operations of (Holdings) Limited (hereinafter “WM” or the “Company”), in the course of which we engaged on specific matters law firms in the UK, Guernsey, Germany, Hong Kong and South Africa.
  2. The aim and purpose of the legal due diligence was to robustly examine all aspects of the Company and its business thoroughly, as part of a process to confirm compliance with applicable laws and regulations.
  3. Given the specialist nature of WM’s business and its global reach, the team at Fasken Martineau, engaged lawyers in several other highly regarded law firms, who also participated in this due diligence exercise. The full complement of legal firms that had teams participating in this due diligence exercise was as follows:
  1. Fasken Martineau LLP (London)
  2. Fasken Martineau DuMoulin (South Africa)
  3. Mourant Ozannes (Guernsey)
  4. SKW Schwarz (Germany)
  5. Bates Wells Braithwaite (UK)

Stephenson Harwood (Hong Kong) were also engaged to advise WM on a limited retainer.

  1. Other than the above, and although not forming part of Fasken Martineau’s brief, my team also received and reviewed a copy of the due diligence report detailing the positive results of the physical and documentary due diligence on all IT and technical matters, which was carried out by a sector-leading firm from London.
  2. Similarly a detailed regulatory report was obtained from one of the world’s leading telecommunications consultancy firms (Frost & Sullivan’s Global ICT Practice) in respect of international regulation as it applied to WM’s business.
  3. I am also aware having been informed by you and having seen a copy of their report, that WM further appointed CMS Cameron McKenna in its capacity as an expert telecommunications counsel to conduct an additional due diligence review, as the senior telecommunications partner there had recently joined them from one of the UK’s senior regulatory organisations (OFCOM).
  4. The business sectors examined in respect of this thorough legal due diligence exercise, which continued for over six months, included detailed investigations of legal and regulatory compliance in the following business, commercial and regulatory sectors:
  1. Legal.
  2. Regulatory.
  3. Jurisdictional.
  1. International operations.
  2. Organisational.
  3. Corporate Governance.
  4. Management.
  5. Regulatory authorisations and licences.
  1. Contractual (including areas such as the contractual matrix supporting WM’s particular business model, service delivery, e-commerce, international payment arrangements and payment gateway).


  1. Intellectual Property ownership, including trade marks.
  2. IT and Technical.
  3. Internet.
  4. Personnel.
  5. Insurances.
  6. Competition.

The conclusion of the legal due diligence – which was one of the most thorough that I have engaged in over a 30 year career – was satisfactory to the extent that Fasken Martineau was happy to arrange for delivery to the United Kingdom Listing Authority (UKLA) of WM’s application for confirmation of WM’s eligibility for a listing on the Main Board of the London Stock Exchange

You did of course subsequently confirm to me that the UKLA had confirmed WM’s eligibility to apply to list on the Main Board of the London Stock Exchange if it had elected to do so. Passing the UKLA’s eligibility for listing test is a significant achievement and an indication of the professional and thorough way in which WM’s affairs had been structured.

Kind regards.

(Note: The Attorney who is the author of this letter of confirmation can be contacted via the Company)

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The Telecommunications Research Unit of Frost & Sullivan conducted detailed additional due diligence to confirm the Regulatory environment applicable to and its global Affiliates (VSMPs), to reconfirm the robust nature of’s global business model.

This additional due diligence again reconfirmed that’s Affiliates (VSMPs) enjoyed the same status as

A letter illustrating the summarized results of this additional due diligence can be seen by clicking this link. The contents of the original letter are reproduced below: 



4 Grosvenor Gardens
London SW1W 0DH
United Kingdom

11th April 2011 (Holdings) Limited
Granary House
St Peter Port
Guernsey GY1 2QG
Channel Islands
Attn: Mr Stuart Sterzel, CEO

Mr David Smith
Fasken Martineau
17 Hanover Square
London W1S 1HU


Dear Sirs

RE: Regulation Statement on

This letter provides Frost & Sullivan’s professional opinion on the telecommunications regulatory environment in which operates. The discussion will rely on existing analysis conducted by Frost & Sullivan on behalf of (Holdings) Limited. This analysis is available in the report “New Patterns in Global Mobile Telephony” prepared in June 2009 and in the addendum to this report produced in August 2010.

This letter will briefly describe the structure of a telecommunications market regulatory framework. It will discuss the technological nature of the service offered by and, consequently, offer a view with regards to which regulatory regime is subject to.

Brief Introduction on Telecommunications Regulatory Frameworks

Telecommunications regulatory frameworks are continuously changing as technologies evolve and new services enter the market. The typical structure of a telecommunications regulatory regime in relation to voice and messaging communications services has evolved from one which exclusively considers telecommunications networks such as PSTN1 and cellular networks to one where services that are partially or entirely based on IP2 traffic are also included.


1 PSTN (Public Switch Telephony Network) is the fixed telephony network service that delivers voice communication services to households and offices.


Consequently, from a telecommunications regulatory framework point of view, there are two main families of mobile and wireless voice and messaging services.

The first family includes traditional telephony and services that use cellular networks.

The second family includes services that either carry voice and texts over IP networks exclusively, or use IP networks for part of the delivery of their services.

The Technological Nature of’s Service

Taking into consideration this overall view of telecommunications regulatory frameworks, it is important to understand the nature of the service provided by Webtel.mobi3.

  • does not own and manage a cellular network. is therefore not a mobile network operator.
  • does not partner with mobile network operators for either using their network infrastructures or buying air traffic. is not a full mobile virtual network operator. It is therefore not a thin mobile virtual network operator (MVNO) and neither is it a call service reseller.
  • does not use the customer’s existing telephone service to initiate, carry out, and complete any calling and SMS messaging. is therefore not a call-back service provider.
  • does not offer a service that is entirely IP-based. Voice and messages are not transformed in IP packet and sent to the destination. is therefore not a mobile VoIP4 provider.’s users have to access the Internet in order to initiate a call, after which he or she is connected to the destination through a dedicated next generation switching technology. therefore offers a mobile communications service that is Internet-initiated.

Regulatory Environment for

In light of the above analysis5, is not part of the first family of communication services (i.e. those entirely based on networks such as PSTN


2 IP (Internet Protocol) One of the key network protocol that enables the existence of the Internet as we know and use.
3 Note that a detailed description on the service provided by is available at “New Patterns in Global Mobile Telephony”, Report prepared by Frost & Sullivan June 2009, Chapter 3, Page 11-12.
4 VoIP stands for Voice over IP



and cellular networks). Instead, because is an Internet-initiated service, it is part of the second family of Internet-based services. Therefore, is subject to the regulatory environment that affects any other Internet-based services.

The specific regulatory environment applied to depends on its location. headquarters are based in Guernsey. Therefore the Guernsey regulatory environment is the one which is subject to.

As discussed in the first part of this letter, provides an Internet-initiated service and this service is provided in Guernsey – no matter where it Is accessed from. In addition to that, does not provide a physical product to other jurisdictions, or ship a physical product, or provide a physical product for download to mobile phones or computers in other jurisdictions. In light of all this, is regulated by the Internet regulation valid in the Island of Guernsey.

Being not part of the European Union, EU Internet regulation is not mandatory in Guernsey that is primarily responsible for self-regulation.’s self–regulation was discussed in the Addendum to the Report “New Patterns in Global Mobile Telephony” published in August 2010. But, it is useful to remind it.'s Self-regulation

The self-regulation that applies would need to confirm with what is deemed to be “fair and reasonable”, as its (self) regulation would be primarily geared towards not leaving itself vulnerable to lawsuits by customers.

The areas of regulation that need to be addressed by should be addressed by the company stating its policy on these aspects clearly in their Terms of Use / EULA (End User Licence Agreement). The three most important aspects that need to be addressed and clarified in the End User Licence Agreement are:-
Policy on Usage of Stored Credit.

This is addressed in’s EULA. Currently it states that the stored credit is valid indefinitely. We understand from that this is being changed prior to its listing to reflect a period of validity of six months before expiring – which is a generally-accepted international norm.
Policy on safeguarding of personal data.’s EULA clearly describes its policy in the “Confidentiality” and “Terms of the licence and Restrictions” sections of its EULA.

Policy on Emergency Calls.’s EULA clearly describes its policy in the “Disclaimers” section of its EULA.


5 A more detailed analysis of the nature of the service offered by is available in the Addendum, published in August 2010, to the Report “New Patterns in Global Mobile Telephony” Prepared by Frost & Sullivan in June 2009



Other than the above,’s jurisdiction, EULA and method of service provision make it compliant with all relevant international regulation on its service, and it is able to provide its services in an otherwise unrestricted manner worldwide.

The same provisions are applicable to’s VSMPs (Virtual Specialized Mobile Providers), as owns the URLs, provides and administers the VSMPs’ services in all respects, bills the customers, and gives the VSMPs no autonomy whatsoever. As such, the VSMPs sites are in fact an extension of the site which only differs in colour and logo, and the VSMPs themselves would be classified as independent marketers of the service.


The professional opinion of Frost & Sullivan is that is subject to telecommunications regulatory frameworks as an Internet-based service because of the technological structure, nature and method of operation of its service. Being the company headquartered in Guernsey, is subject to Guernsey Internet regulatory environment.

Yours sincerely,
Saverio Romeo

Saverio Romeo
Senior Industry Analyst
Telecommunications Research Unit
Frost & Sullivan Europe 


Frost & Sullivan’s ICT practice advises or partners with global market leaders

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Back to top – and thereby its Affiliates (VSMPs) – have undergone some of the most thorough, robust and detailed due diligence in business history, on a global scale. This has been done in order to ensure that both the Company and industry-leading third parties have confirmed that all aspects of the Company and the services which it provides on a global basis are fully legal, compliant, well-managed and ethical; and fully conform with all necessary and required standards and processes to the highest degree, to adhere to the highest standards of Best Practice in all that the Company does.

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