There are quite a few companies providing mirror numbers now. Where are we headed with this interesting new business model?
Rebtel was actually one of the first ones that created a local phone number for (both) the party to be called and yourself, and then to either connect the two local calls or enable direct calling. That concept of telephony has now been applied in various different contexts. The nice thing about this service is that it is viral. You invite a friend into the service and they can invite you and that way it spreads, so the market for this service is quite big.
But with SIP, these mirror numbers were possible several years ago. Right?
It is not about getting the local numbers and using the latest voice technology. It is about leveraging the internet for an ordinary mobile phone.
Is this model going to scale? If this trend catches on, we might probably need a trillion phone numbers worldwide?
People today are not calling phone numbers they are calling the name associated with number, which is a major behavioral change. We are using numbers in a smart way. The usage pattern of our subscribers shows that those who call international numbers, they only tend to call their top five contacts frequently. And for business callers they spent 90% of their calling time with top five contacts too. It is easy to type these five favorite numbers in the address book.
You must be paying to procure the numbers. How do you make money? Is it mainly through the phone charges you put on calls or is there any ad insertion as well?
There are phone charges. But we also get a small share in the interconnect revenue which offsets the cost used in connecting the numbers and in converting TDM to IP.
Have you explored the voice ad insertion option to generate revenues?
Advertising based telephony business is an unproven ground right now. We did some testing around this model back in 90s and it proved unsuccessful.
You have raised $20 million funding so far? Is most of that being spent on marketing? How do you market your services?
We are spending money on marketing and optimizing our services to include added functionality that is getting ready for launch. I would say we are spending a bit more on technology to roll out in more countries and trying to remove any friction which comes in the way of viral aspect of our service.
Could this be a short-term opportunity till the long distance call costs come down? And what happens when voice becomes free?
Telecom business runs into thousands of billions worldwide and the day voice becomes free it will become a major issue for major telecom providers like Vodafone and the rest. For companies like ourselves we will find a way to compensate the cost. But the market is not changing that quickly at the moment and the companies which will bring cost of voice down to zero will be companies like Rebtel
What is your value added services roadmap? What value added services do you offer now and what do you plan to add in the future?
When we analyzed our usage we found that more than 50% international calls are made by small businesses to call offices they have located in various parts of the world and we have received a positive feedback from these companies claiming to save thousands of dollars yearly. That in turn has encouraged us to develop services that suit this group, that these services include roaming, conference calling, etc.
Among the models such as yours and those of Jangl, Talkster, Jaxtr, which one do you think is going to prevail going forward?
It depends on your targeted audience. If we look at something like Jangl, private anonymous calling is fairly small market niche and very difficult to monetize, we are targeting people with international contacts that includes expatriate immigrant community. At the moment young European workforce is continuously moving around the globe. This trend is on the increase. That is the niche where Rebtel focuses and in addition to that, the small businesses.
How has Facebook integration been for you? How many sign ups through Facebook?
We just launched the application on Facebook. It is a new experience for us. I haven’t been through data yet. It is too soon but what matters is that the Rebtel service is spreading virally. It is very easy to assign a local number to your friend by a single click on his photo on Facebook, and in return they will receive a number to contact you. It is easier to create 20 numbers or more at a time by clicking a group of 20 pictures on Facebook and generate 20 numbers for them as well to contact you. That is time saving as well.