Interview with James Tagg, CEO, Truphone
What is the total addressable market for mobile VoIP?
There are about 75 million phones in the market today that can do mobile VoIP. Over a billion can do some sort of bridged mobile VoIP solution.
What has the traction been for you geography wise?
We have customers in 149 countries. So the interest is broad. Our number 1 country in UK, followed by US and Italy.
With fixed VoIP you need ATAs to get going. With mobile VoIP, if you have a smart phone you don’t really need any other adaptors. So in that sense mobile VoIP is going to be even more disruptive than fixed line VoIP.
Yes. It is relatively easier to use. You don’t have to locate any junction boxes and find sockets to plug things in and out. You press a couple of keys on your phone and set it up and use it. So yes, a lot more disruptive than fixed line VoIP.
There seem to be four major mobile VoIP players out there in the market (apart from Skype): Fring, iSkoot, EQO and yourself. What are the ingredients of success in mobile VoIP?
Mobile VoIP is technically quite complex, both on the server side as well as the handset side. There are lots of developers that have announced support for Nokia phones that come with VoIP capability. They give you username and password which you can put into the device. And that is way too hard. So basically very few companies have been successful in doing the integration work and making it work. You need to be smart. Apart from that you need to be well funded. The ones that you mentioned are all well funded. Hopefully we are smart too.
You developed your application on Asterisk. When you started out what made you choose Asterisk rather Skype using their APIs or even BT using their Web21C platform? There are also vendor sponsored developer programs.
We actually built our first version of Truphone using BT developer program. Our first version ran on BT system. The issue with that is you are talking five nines, and it is a very secure network. So we had to move away from that to do something that was a bit more flexible and a bit more debug-able, something that we had under our control.
Some of the cell companies are exploring mobile VoIP offering. But at the same time VoIP could cannibalize their revenues. Do you expect them to stay clear of VoIP during 2008?
They won’t stay clear. But they will take time to launch these services.
Would companies like yourself be looking to productize your platform and license it out to cell companies under a Whitelabel model?
We have had a couple of requests to whitelable our platform and we will never say no. We would be fools to say never. There is potential to sell millions of seats or licenses.
A question about the revenue models of mobile VoIP players like yourself: These models are complicated and depend on things like interconnect regulation or in case of companies like iSkoot and EQO depend on the number of free GSM minutes available. How long do you think these revenue models will be sustainable?
Over the next decade we will move from minute based system to a subscription based system. In terms of paying to make calls, I don’t see why we will not continue to see that over the next 50 years. You may pay a flat rate rather than per minute charges but it is likely to stay. There are a few things that challenge that orthodoxy. For example advertising and a few other tricks like that.
Is there a future for ad based telephony within mobile VoIP?
There will be some contribution coming from advertising. I don’t know what that contribution will be. For our business model we don’t need to worry about that. Someone like Blyk needs to generate 100% from advertising. For us even if we get a single digit percentage contribution that would be fantastic. I think it will be a little while before we see ad based mobile VoIP.
Flash phones is a big trend in the market. Would that have implications for your business at all?
If Adobe put a good version of Flash across various mobile phones that would make it a lot easier for us to develop new services because they will run across a whole bunch of phones. So the prospects would be great. Hopefully they will not make a mistake that Java guys made where versions of Java are so different from each other that it is like writing application for 150 operating systems.
Do you have a developer program of your own or are you working on such a program?
We are working on one and we have a couple of developers right now who are working with us on a private basis. We will at some point this year open it up to developers. We are also working with partners to bring some applications to the market. The Iotum-Truphone mashup available to Facebook users is one such partnership example.
