Interview with Mark Jacobstein, CEO, iSkoot
Why have you so far stayed clear of direct-to-consumer B2C offering?
That part of our business has not received much attention yet. But that will change and my guess is that millions – if not tens of millions – will be using our direct-to-consumer service. So there is going to be much more emphasis on viral marketing, search engine optimization etc to drive that. There will be more handset OEM deals. 
Like your B2B offering, your B2C offering will also be dependent on MNOs somewhat. Right?
Not so much. Rather than hosting the termination management POPs at the operator NOC, we will host them on our own NOCs. We have NOCs around the world that we use for direct-to-consumer business.
How do you make money from your B2C offering?
The SkypeOut feature is turned on in this B2C offering and that is how we generate revenue, generating SkypeOut minutes.
How many B2C customers do you have?
Right now we have hundreds of thousands using our B2C service.
Going over to your B2B solution, why would a mobile operator want to work with you? Are you not cannibalizing their high margin long distance business?
For Skype-to-Skype calls what the operators have determined is that we are not cannibalising their business. In fact we are adding to their business because if I am on Skype and my friend in Hong Kong is on Skype, I was not going to call that person for two dollars a minute anyway. I would have waited to Skype them over PC and completely cut out the operator. So by putting Skype on mobile phone at least the operator is able to use up the free minutes. With SkypeOut which involves calls to a non-Skype user, you probably had no choice but to call with very expensive ILD rates. So some of the operators prefer not to turn SkypeOut on. At least not at first. They are however realistic about the ILD rates substantially reducing over time with the calling cards and callback and Skype etc. At some point therefore they will also turn on SkypeOut.
MNOs in the US are allowed to block VoIP if they want to. But are they also laying down similar conditions for MVNOs that resell their offerings or is the MVNO allowed to do whatever it wants with the data connection?
Don’t know. But if you want to start an MVNO and offer VoIP, the wholesale rates for data channel are so high that if you allowed VoIP calls over the data channel you will go out of business.
The MNOs in Europe are mostly working around MSISDN-IMSI mapping in order to provide VoIP transparently. They want the subscriber to be able to use the same number in the GSM cloud as well as IP cloud. That seems to be the predominant method. How does that impact your business model going forward?
Yes I think that is the predominant model and I think that is the right way to go and it is perfect for us. We also bridge MSISDN-IMSI with Skype name. At the end of they way people want to call names and not numbers. Whatever it takes to normalize MSISDN with Skype ID with Yahoo name with a Gtalk ID etc, will all be in the backend transparent to the user. In the Skypephone we have the Skype Presence in the address book. As the MNOs move towards that we are in a good position because we already do that. In fact we have applied for numerous patents around that concept.
How many minutes of use are you driving through your partnership with H3G?
It is in millions of minutes.
How many Skypephone subscribers are we talking about at H3G?
iSkoot led service is not only available on Skypephone but the capability is preloaded on every single H3G phone that is being sold now. Skypephone is to H3G what iPhone is to AT&T.
There are still lots of challenges to overcome for mobile VoIP.
I agree that there are lots of challenges. The whole reason a company like iSkoot exists is because mobile VoIP is very hard to accomplish. A couple years back people thought that mobile VoIP is as simple as putting a client on mobile phone just like putting it on PC. 3g had good enough speeds on paper. Had that turned out to be true, iSkoot would not exist. I think, the idea of using circuit switched network thought of by our founders was brilliant. If mobile VoIP were easy, the MNOs would not need us and neither would Skype.
Some of the other mobile VoIP providers have chosen to use the open source telephony platforms. You built your application on top of Skype. Aren’t you very much dependent on Skype maybe and is that not a bit risky?
Our solution works on any IM community. We can mobile enable Yahoo or Gtalk or AIM etc. But if we had to choose a partner to start with we would certainly choose Skype. So we are really happy that the first major partnership we had was with Skype
What are the overall prospects of mobile VoIP?
One of the ways I like to think about this is if Skype has over 300 million downloads and roughly 100 million active customers, with mobile VoIP you are talking into a phone rather than a laptop. So if you bring the value of Skype over to mobile phone you can expect hundreds of millions of potential customers.
