Pinger, a mobile application, recently announced that it would be extending its free mobile communication services to Europe. Beginning in Germany later this summer, the company will allow users to send and receive text messages and phone calls for free. This is quite an achievement given the heavily regulated European market.

As Joe Sipher, the Chief Product/Marketing Officer and Co-founder of Pinger, explained to WebProNews, the capitalist system and the Telecommunications Act of 1996 helped to keep prices down in the U.S.

“It’s cheap enough where we can actually make money on our advertising model and still pay for every text and pay for every phone number,” he said of the system in the U.S.

It’s quite the opposite in Europe since the costs associated with sending and receiving a text to a carrier are 700-800 times more than costs in America. For example, the carriers in European countries, such as Germany, pay each other when a customer sends a text.

In other words, if a customer with Carrier A sends a text to a customer with Carrier B, Carrier A has to pay Carrier B a specified amount. However, if the customer with Carrier B responds to the customer with Carrier A, Carrier B will also have to pay Carrier A the same amount. So, basically, the back-and-forth transactions cancel each other out. The carriers still make money though, because they are charging their customers more than the amount that they have to pay out.

Pinger’s patent-pending technology is a symmetry model that neutralizes these high costs by ensuring that no user sends more texts than he receives.

“The real cost of sending and receiving texts in Europe is zero,” said Sipher. “As long as you send as many messages as you receive, there really is no cost; and then, we can layer our advertising model right on top of it.”

To make this model work, it incorporates a gaming factor that gives each user a meter with 100 points. Once a user sends a text, his meter shows it has 90 points. If he receives a text in return, his meter goes back up to 100 points. If a user begins to run low on his points, he can send a message via his email or Facebook wall to encourage friends to text him to push his points back up, an aspect that Pinger learned from its sister company Zynga.

“It fits right into the existing model,” said Sipher. “We’re just entering in as another carrier.”

There are plenty of companies that create great services and offer them for free initially, but then decide to charge its customers. When asked about this trend, Sipher told us that Pinger would not follow suit.

“The difference between us and the people that say, ‘Oh, we’re gonna charge later,’ is that we’ve made free profitable for us,” he said.

He believes that their model will help them expand into multiple other countries and not only simplify mobile communications, but also reduce the cost of them for all users.

“I think we can take this model into many, many parts of the world,” said Sipher.

The report found that low dollar values, a slowdown in the U.S. economy, and a shifting global Internet population have all contributed to online retailers considering international markets as important to their growth strategies, but many remain cautious about global expansion.

"At no time during the past few years has interest in international online commerce been higher," explained Zia Daniell Wigder, Web Globalization Analyst and lead author of the report for JupiterResearch. "US online retailers that have no global strategy risk missing out on the biggest areas of online growth during the next five years."

Regulations, geographical obstacles, along with consumer’s differing behavior and expectations in international markets are just a few of the issues that have made online retailers cautious about expanding internationally. Online retailers are also reluctant to give control to local mangers in global markets.

"Today, over 60 percent of companies with global transactional Web sites rely on a central globalization team to manage those sites," said David Schatsky, President of JupiterResearch. "A centralized staffing structure will only work if sites are developed and optimized through regular contact with local offices."