Truphone’s acquisition of SIM4travel

Truphone has acquired SIM4travel, mobile operator focused on bringing affordable roaming to travellers, for a little over $5 million. Truphone is a privately held startup. The company has so far raised $25 million in funding. What could the acquisition mean for Truphone? In short, this acquisition allows Truphone to do two things: (1) offer bridged mobile VoIP to an established SIM4travel customers and (2) offer a more attractive private label solutions package to MVNOs. The other bit I would highlight here is the fact that the combined Turphone-SIM4travel type solution could have a major impact on wifi-gsm handover (dual mode FMC) type services.

With this acquisition, Truphone as an “MVNE” is bringing a more appealing package to the table. It is able to offer MVNOs a softclient based mobile VoIP as well as bridged VoIP. The original Truphone plan was to offer a platform rather than a service. Bridged VoIP picks calls from GSM switch and dumps it on the IP cloud. Truphone will be able to offer its own customers (as well as MVNOs) these two types of VoIP plus low roaming charges – all on one SIM. And it can offer these services worldwide.
Another way of looking at the acquisition: Given the type of service SIM4travel offers, it could use bridged VoIP technology. That is where Truphone technology can come in. Using VoIP in the backbone lowers down the SIM4travel costs and improves the margins. On the other hand, Truphone’s existing offering gets extended this way and the startup is able to offer bridged VoIP. Sounds like a great fit then.

The acquisition enhances Truphone roaming as well. Truphone customer roaming overseas needs to be in the vicinity of wifi zones to take advantage of low VoIP rates. In cell zone the user pays huge roaming charges. With SIM4travel that problem is solved since SIM4travel specializes in low roaming rates. Customers receive free calls in various countries while roaming. Roaming is a major issue with other mobile VoIP offers from companies like iSkoot and EQO.

On last bit: Through the Truphone SIM, hopefully the company should be able to offer a single number across wifi as well as GSM. Where does that leave the handover-based (UMA/VCC) FMC offerings? I would expect emergence of SIM toolkit vendors that will let the customer use wifi telephony in wifi zone and gsm in gsm zone using the same identity/number. So Truphone could be showing us the way forward. However, if call continuity is required (especially when subscriber moves from wifi zone to cell zone during an active call session ..... less than 1% of the subscriber calls), then Truphone will have to develop the handover feature, which I guess has not been developed yet.

Update: This is probably the way to do it (using same identity/number across wifi as well as gsm zones). This patent was granted to Lucent in November 2007.

Update 2: Truphone announced Series B funding of $33 million a few days after the SIM4travel acquisition announcement.