• 435k IPTV subscribers. Net additions during the quarter: 41k. Number of subscribers increased 10% q-o-q

• “1.3% Local revenue decrease and the 4.4% Domestic Long Distance revenue decrease, mainly due to mobile and VoIP substitution”.

• 4.28m broadband subscribers (including ADSL and FTTB) at the end of the 1Q08. 3.6m ADSL subscribers, 634.5 thousand FTTX subscribers, which is up 97.7 thousand in the quarter.

My writeup on Skype Journal posted day before yesterday ........

Skype’s recent mobile VoIP announcement is an admission that VoIP over 3G is not practical yet. This is evident from the fact that Skype has chosen to implement iSkoot type architecture for its own mobile VoIP offering that it announced last week.

http://skypejournal.com/blog/2008/04/skypes_mobile_dilemma.html

I noticed the keyword Azaire Networks being searched on iLocus all through April. So I knew something was going on (or the lack of it). Azaire Networks has indeed and unfortunately been shut down. It happened towards the end of March. Azaire had a nice data continuity story rather than pure voice handover among the FMC solutions in the market. Azaire also had a FMC security gateway product, something similar to Reefpoint (NextPoint) and Netrake (Audiocodes). Acme Packet and other SBC vendors have been trying their luck in the FMC networks. Azaire and others were supposed to have an edge there. Apart from security gateway and multimedia continuity solution, Azaire had about half a dozen trials going on for its VCC solutions. One such trial was at Orange.

Another recent casualty is Verso that collapsed under its own weight. Never easy to make a business out of acquiring 50 different stressed companies. One of the companies that Verso had picked was Clarent, a first generation VoIP vendor of the nineties. Cisco once called Clarent as the biggest competitive threat Cisco faced in service provider VoIP business.

Our survey of MVNOs reveals that nearly one-fourth of MVNOs are already offering/trialling mobile VoIP. By 2010 over two-thirds expect to have a mobile VoIP offering in place. The survey is part of our report ‘Mobile VoIP: 2008 Status Report’ published today.

According to the report, MVNOs could drive the first phase of mobile VoIP apart from the independent startups. The eligible providers are MVNOs, MNOs, ISPs, and Wimax operators. As far as Wimax operators are concerned they have to offer VoIP to differentiate themselves from other broadband providers. Mobile Wimax however is not expected till 2009. Wimax operators at present are looking to offer VoIP over laptops and fixed phones through ATAs.

MNOs can potentially use mobile VoIP feature to dump voice traffic transparently on IP. But they have cannibalization issues. ISPs on the other hand would see this as a completely new service since they have not dealt with mobile services before. So for now, MVNOs are expected to show more interest in mobile VoIP. And since MVNOs are likely to drive the first phase along with the independent startups, the take up is unlikely to be huge as per the report.

72% of Voice 2.0 developers prefer to work with Open Source telephony platforms like Asterisk, OpenSER, and FreeSWITCH and offer services direct to the consumer - according to our survey. Open Source platforms mentioned here are now considered carrier grade. For a standalone Voice 2.0 applications open source telephony platforms meet the developer criteria. Although working directly with telcos like BT (rather than going via vendors like Microsoft or Sylantro) is the second most favoured choice, it seems that Voice 2.0 developers overall prefer to take control of their development by utilizing open source platforms and then going direct to the end user.

As has been the underlying characteristic of VoIP industry over the last 7 years, the growth pattern refuses to change direction. Our 9th annual industry update published today reveals a yearly increase of 67% in VoIP access server licenses shipped worldwide, and a 35% increase in VoIP traffic.

There is no evidence yet of a long term slowdown in carrier spending. It seems that despite the risk of recession (especially in the US) carriers have no choice. They have to build out the IP infrastructure if they are to remain relevant.

The new investment cycle that started in 2004 to do with access part of carrier networks continues into 2008 and is likely to remain so through to 2009. That can be said with confidence in case of European countries at least. On a global level, even if the investment slows down due to financial issues, the carriers have to spend nonetheless. They have little choice, it seems. Due to the losses in landlines, wireline operators are expanding into mobile and mobile operators on the other hand are looking to leverage fixed broadband networks for voice offload or over-the-top services. The underlying technology that lets them both achieve those objectives tends to be VoIP.

The report covers various aspects of VoIP industry and is quite comprehensive as the previous annual reports. A lengthy post would not be possible. I have however listed a few bits from the Executive Summary below. A big thank you to those who ordered the report in advance. We appreciate your vote of confidence. There are also two other reports we announced today (Voice 2.0 and Mobile VoIP).

SMIC earned revenues of $362.37 million in 1Q 2008. Compared to 4Q 2007, there was a decrease of 8.3% in revenues. Net Loss was substantially high at $119.7 million which was just around $0.9 million in the previous quarter.

The fab shipped 454.3 million wafers (8”) which is 43.2 million less than the shipments of last quarter. The capacity utilization of the fab was at 92.1% in the quarter down by 2.3% q-o-q.

Communications continued to form the maximum share in sales at 54.3%. Last quarter it was 47.4%. Computer and Consumer segments contributed 12.8% and 25.9% respectively. Other segments contributed the remaining 7%.

Atheros earned revenues of $114.5 million which was up by 0.2 million q-o-q. Net income for the period was $7.6 million. Taiwan amounted for the maximum sales with 52% of the total revenues coming from Taiwan while China contributed another 26%. US sales stood at just 1%. Asia continued to be the largest business region for Atheros with 94% of the total revenues from there. However comparing with Q1 of 2007, the sales from Asia have declined by 4%.
Hon Hai Precision Industry Co Ltd accounted for 17% of net revenues and was the only major customer for the period.

WLAN product adoption by retail and carrier customers of Atheros was the primary source for the quarterly revenues. Other areas that did well for Atheros include PAS, Ethernet and GPS chipsets. In terms of shipments GPS and WLAN chipsets grew in units shipped while PAS sales declined. Overall, comparing the shipments with those of Q1 2007, there was an increase of 58% in the number of chipsets shipped. Revenues did not grow proportionately due to decrease in average selling price of the chip.

To my knowledge, there is no such thing out there yet. But there will be. A couple of companies are doing it at the client level (for Web TV) but the only source I came across that is doing it at server side middleware level is this thing called Toroid. There are not many details on the site.

There are several Internet TV companies coming up all over the world. I am sure they would want to get their hands on something like this. An Open Source IPTV middleware will help evolve and scale online video/TV to new heights.

There are a few drivers for Open Source IPTV middleware already. Several service providers are unhappy about the integration problems they face in putting together various IPTV components. Open Source will only compound those problems initially but those IPTV vendors looking to sell to Internet TV (as opposed to telco centric IPTV) companies will put interfaces into such a system. IPTV service providers are usually stuck with a small number of ecosystems that come pre-integrated with other IPTV network elements such as VoD servers and Encoders etc.

ThinkPanmure thinks telcos worldwide will set up an old style cartel with shades of 19th century settlement rate system. It is supposed be a joint initiative to offer Skype type services. I am not sure if such an alliance is cooking, but if that is the case, the stuff being cooked is likely to remain half baked. Here is why:

• It will be an intergalactic challenge to bring two dozen telcos under one roof. Previous attempts to set up alliances - Concert, Global One etc – have failed.

• The proportion of IP-IP calls is miniscule. It is in the region of 6% of the overall voice traffic in France, the country with world’s highest VoIP penetration. On a global scale IP-IP calls proportion is less than 1%. What that means is even with a Skype type service you are still paying for terminations, the same old story as in the landline business.

Revenues for the 1st quarter of 2008 were $177.1 million, down by 14% q-o-q. Net loss stood at $17.1 million for the period up from $13.4 million in the previous quarter.

Communications contributed about 39% of the total revenues (the second biggest contribution), an increase of 7% from the last quarter. Computing was the largest contributor of revenues which brought in 41% of the total quarterly revenues.

It has been a while since I heard any major development on the consumer FMC side. I am assuming that mobile VoIP and Femtocell have pushed this thing back a few years. But there must surely be something in store for enterprise FMC during 2008. There is much more activity around enterprise managed FMC solutions. All major PBX makers have announced their products now.

The early adopters here have been healthcare, education, and warehouse operations. But there is interest coming from new segments such as the banks, we are told. With early implementations in particular there was need to have on-campus mobility as well as remote mobility so segments such as warehouse operations - where WiFi access can be very important - picked up some of the FMC first. Hospitality and healthcare also have that campus aspect where you can put dual mode device on campus on WiFi and same number can work on cellular.

• 4.65 million VoBB subscribers in France as of end 1Q08. Added 547k subscribers during 1Q08

• 722k VoBB customers outside France. Poland: 164k VoIP subscribers, other European countries 558k

•VoIP represented 61% of the number of ADSL subscribers and IPTV represented 17%

A few open questions on the recent Jajah/Yahoo deal, perhaps our readers can answer:

Whatever happened to the Dialpad acquisition by Yahoo? Was that investment a waste then? Yahoo had acquired the company because apparently they needed an insight into the call routing science.

Jajah does not do PC-to-Phone application. Is Jajah going to develop that capability for Yahoo Messenger, or is it going to be a similar application to Jajah i.e. web initiated telephony that does not necessarily use the public Internet? Jajah voice quality is great right now because the company does not use public Internet.

It remains a mystery why Sonus is not keen on acquiring a feature server company such as Broadsoft or Sylantro. They should have made an acquisition of a Class 5 feature server three years ago when consumer VoIP got going. Netcentrex was another option available at the time.

Sonus has a residential feature set in their access server product but it has not done so well. Sonus has enabled consumer VoIP offerings of AT&T (Callvantage), Qwest, AOL, Carphone Warehouse and others. Only Carphone has scaled up somewhat.

The absence of an alternative vendor in consumer VoIP has meant that most business is ironically going to the legacy vendors. Sylantro and Broadsoft are small players in consumer VoIP. I reckon Sonus with one of these products would have done very well. Sonus placed its bets on over-the-top VoIP rather than other VoIP-to-the-edge options. It turned out to be right but did not translate into any fortune for Sonus.

AT&T: 379k IPTV subscribers, up 148k from previous quarter. Addressable market 9 million homes

Verizon: 1.2 million IPTV subscribers, up 263k from previous quarter. Addressable market 82% of 7.9 million homes passed

• VoIP subscribers: 3.2 million, representing 12.6% penetration of service-ready homes passed

• Added 280,000 VoIP subscribers during the quarter

• Continued roll out VoIP services to SMEs. As of March 31, 2008, TWC had 10,000 commercial VoIP subscribers.

• Added 30,000 net subscriber lines in the 1Q08 and finished the quarter with more than 2.6 million lines in service

• Average monthly customer churn increased to 3.3% in the first quarter 2008 from 3.0% in the fourth quarter 2007.

• Marketing cost of customer acquisition: $216 per customer. Total marketing costs during the quarter: $61 million.

Total revenue $27.9 million, a 20% decline from 4Q07

VoIP product revenue $20.7 million, compared to 4Q07 revenue of $20.9 million

1 customer accounted for 10% of 1Q08 revenues: MTN. Top 10 customers accounted for 52% of Q1 revenues. 6 customers each accounted for $1million or more in Q1 revenue.

4 new switching customers in 1Q08.

Revenue split: 16% North America, 84% International. Compared to 4Q07 split of 23% North America, International 77%.

Service revenue: $5.6 million. Gross margin: 53.6%.

United Telecom, a Bangalore based telecom company contracted by the Indian authorities to build out an advanced broadband network in the tourist hub state of Goa, will be offering triple play services in the state including IPTV. UTStarcom won the equipment contract that includes VoIP, IPTV, and GEPON gear - the whole lot.

United Telecom is itself a vendor supplying optical networking components to service providers like BSNL. And although Reliance and BSNL have already laid out broadband networks in Goa, United Telecom’s footprint is all fiber. In fact it has already laid out majority of the FTTH network in the state.

Tata Communications will be deploying the high density gateways from Sonus. This is for the international footrpint, not for the domestic Indian network. The domestic network deployment would be a much bigger opportunity if it materializes for Sonus. Sonus has been involved in trails with Tata as well as Reliance in India.

The international footprint where Sonus gets its foot inside was inherited through the VSNL acquisition. Here comes the history:

- ITXC, one of the largest VoIP ILD wholesalers, deployed multiple platforms including Excel Switching (now part of Dialogic), Huawei, Vocaltec, Cisco, Clarent (now part of Verso gone bankrupt)
- ITXC standardizes around Cisco platform, the famous AS5300
- ITXC gets acquired by Teleglobe. VoIP traffic growth remains flat for a while.
- Teleglobe gets acquired by VSNL. By this time VSNL had already been acquired by Tata I think
- VSNL also used Cisco VoIP gear in its international footprint
- Teleglobe/VSNL Intl did not migrate to high density MGX platform of Cisco
- TODAY: They announced move to Sonus platform

154k IPTV subscribers as of end 1Q08

Added 38,000 IPTV subscribers in 1Q08

Deutsche Telekom had dropped the price of its starter package by 17 percent in March 2008

Telco to invest in improved customer support for IPTV

VSDL roll out in 50 cities continues

• 1.7 million VoIP subscribers as of end 1Q08

• Added 93k or 5.8% during 1Q08

• VoIP represents 36% penetration in homes passed

• VoIP represented $160 million revenue during 1Q08 which is approximately 8% of company’s consolidated revenues for the three months ended March 31, 2008

Jangl investors should try to sell the company assets to a telecom vendor. Some of telecom vendors are developing features that enable ad supported communications apps. Still early days but a Jangl platform would place them ahead of most competitors.

We are going to see two relevant trends going forward. One is the re-positioning of telecom service providers as some sort of media companies enabling various forms of entertainment, content, and social networking through PCs, TVs and mobiles. The other is the re-thinking among Voice 2.0 companies to productize their platforms.

Here is the annual list of honors from our recent chip report:

BEST MARGINS: Qualcomm enjoys the maximum margins among communications chip companies. It spends around 67.5 cents to earn $1 of revenues.

BEST COST CONTROL: Cavium Networks was able to decrease its total operating expenses by 22.34 cents per dollar last calendar year, which was 18.3% less compared to the previous year.

BIGGEST R&D SPEND: Ikanos spends around 47.5% of its revenues on Research and Development. That is an increase of 7.62% compared to previous year.

• Telio had 148.9k subscribers at end 1Q08. Total increase of 4,210 during 1Q08.

• Majority of customers (104,854) in Norway.

• Revenues: NOK 94.3 million, same as in 4Q07.

• Average monthly revenue per subscriber NOK 261

• Serving 1,900 VoIP lines to the SMB market.

• Mobile VoIP, new company focus

• Added over 639k VoIP subscribers during the 1Q08.

• Comcast ended 1Q08 with a total of 5.1 million VoIP subscribers.

• 5.1 million VoIP customer base represents 12% penetration of the total Comcast addressable market

• Revenue from VoIP service more than doubled to $573 million in the 1Q08 compared to the same period of the prior year. Circuit-switched phone revenue declined $69 million to $14 million in the 1Q08.

• As of 1Q08, Comcast had 66,000 circuit-switched customers, and expects to wind down that business by mid-year 2008.

• Telecom Italia ended 1Q08 with 136k IPTV subscribers, an increase of 56 thousand in the quarter.
• 1.5 million VoIP subscribers as of end 1Q08, which represents 23% penetration into retail broadband access lines.

• VoIP subscribers in Norway 133K. Added 2k new subs during 1Q08
• VoIP subscribers in Sweden 209K. Added 7k new subs during 1Q08
• VoIP subscribers in Denmark 107K. Added 8k new subs during 1Q08

• 1.09 million VoIP subscribers at the end of 1Q08
• Added 125,700 new subs during 1Q08, the most active VoIP quarter so far.
• VoIP revenues nearly doubled to $121 million compared to pro forma revenue of $63 million in the year-ago quarter.
• VoIP represents 11.4% penetration into the overall customer base.

If Nimbuzz is planning to play with social networking and all the buzz words, it might be a bit late in the day. The market is looking for a monetization story, not a mobile VoIP app that hooks into every IM-client / social network / handset on earth. What is the value in that? There are plenty in the mobile VoIP market already signing up customers without much revenue to show. The only time they generate revenue is when a call is terminated outside the community cloud i.e. into landlines and mobile phones that are not Nimbuzzed.

An IM or a voice chat between Nimbuzz-to-Nimbuzz is not going to generate money. It will remain a challenge to monetize that aspect – I mean for ever! So something is wrong here: You create a community but make money only when you communicate outside that community!!! What incentive is there is expand that community then?!!!

For off-Nimbuzz calls, the company will make money on international calls mainly. Like EQO and iSkoot, Nimbuzz will also re-direct the calls to its local VoIP PoP from where it transports the call over public Internet backbone. So for the amount of time you are on an international call, you are effectively making and paying for a local call in addition. That is like the early PC-to-Phone days when you had dial-up connections. Outside the US, where local calls were metered, you paid for a local call (to your telco) plus the international call rate charged by Net2phone and others. That was not the main factor responsible for slow uptake of PC-to-Phone, but it was a turn off nonetheless.

554k IPTV subscribers as of end 1Q08. Added 43k subscribers during 1Q08

IPTV penetration rate is 11.46% of the broadband subscribers

Telefonica also has over 1.2 million pay TV subscribers in Latin America. Majority are non-IPTV subscribers. In Czech Repulic I think all the 87k pay TV subs are on IPTV

VoIP momentum is shifting within Europe with Eastern Europe coming in strong now. The new set of initiatives is driven by the Wimax service providers. There are over 40 Wimax service providers in Eastern Europe if you count the Baltic states as well. Nearly half of them have either launched a VoIP offering or are involved in such trials. (There is a partial list at the end of this post).

The present VoIP traction in Eastern Europe is different than what we saw two years back. Two years back it was all about the network upgradation of the incumbent telcos there. This time it is a bit different. The alternative carriers are going for the broadband telephony type option. Wimax operators seem to be the driving force right now.

• 2 million VoIP subscribers at the end of 1Q08.

• 21CN update: 58% of UK national core infrastructure built

• 214k IPTV subscribers at the end of 1Q08. Added 94k subscribers during 1Q08. Latest May08 figures released: 250k subscribers.

• 68% of new IPTV subscribers chose a subscription package at a point of sale. Average number of views per subscriber, per month: 29 views

This is for the first time that a major telecom service provider has acquired a major social networking company. There are several possible synergies in this deal. I will pick on one of them. And that is the small business (virtual PBX) offering bundled with the relevant Voice 2.0 apps (communications aware mashups).

All major service providers are exploring Voice 2.0 strategies. Only BT has gone public with its Web21C developer program so far. While most service providers recognize the value of teaming up with their existing telecom vendors to bring in the developers, these switch vendors in turn do not have access to all the developers. They definitely do not speak and Web services language and do not typically provide Web 2.0 APIs except a couple forward looking VoIP platform vendors. In order to gain access to a vast developer pool, service providers have to tap into social networking, which is one of the main driving forces behind Voice 2.0.

There was an aggregated total shipment of 335 thousand IP media server ports shipped by independent media server makers in 1Q08. Shipments represented a slight increase Q-o-Q, however revenues decreased compared to the previous quarter – perhaps an indication that Average Selling Prices are decreasing in this segment.

Estimated $14.7 million were generated by carrier IP media server products in 1Q08.

Session Border Controller (SBC) revenues during 1Q08 were up 22% from the previous quarter 4Q07. A total of 9.9 million ‘sessions’ capacity were shipped during 1Q08 generating $56.8 million in revenues. 4Q7 revenues were in the range of $46.6 million for the segment.

Acme Packet leads 1Q08 SBC segment with market share of 47%, followed by NextPoint. Vendors who made significant inroads into the SBC market during 1Q08 include Sonus and Veraz.

I will be posting overall 1Q08 VoIP revenues tomorrow.

• Added 43,931 new subscribers during 1Q08. At the end of March 2008, the total Belgacom IPTV subscriber base was 349,250
• IPTV ARPU: EUR 17.4 compared to EUR 13.4 a year ago
• Added 9k new VoIP subscribers during 1Q08. At the end of March 2008, the total VoIP subscribers 16k
• During the quarter Belgacom and Twentieth Century Fox reached an agreement to make Fox films available on demand via Belgacom TV, Belgacom’s IPTV service

Nortel has announced an add-on module to bring in Web mashups to the telco world. The module works over standard hardware across the CS and MCS platforms. Nortel has been able to achieve integration with the usual first set of suspects: IM, social networking, TV etc. There are also some interesting combinations of pre-integrated mashups available. Delivery channels are obviously the telecom service providers.

Most other vendors that come in the Nortel league have been working on such a module and the associated developer programs. However none have publicly announced such solutions/program yet. Nortel is the first one to do so. Among the large vendors, NSN’s CBVoIP offers web services based SDK but the vendor has not announced the capability yet; Alcatel-Lucent is in the process of creating such capability on its IMS applications server; Huawei has a developer partnership program going under its IMS Ecosystem project. Again nothing has been announced yet; Ericsson does not have a wireline specific Voice 2.0 program in place yet.

Seems like VoIP had a soft quarter after all. In 1Q08, vendors shipped a total of about 7.9 million VoIP Subscriber Feature Server licenses for deployment in service provider networks generating $144 million in revenue. The number of lines is down by 19% Q-o-Q. The 3Q07 and 4Q07 quarters however were unusually high growth quarters for VoIP Subscriber Feature Servers. If the 4Q07 seasonality in particular is normalized, there is a nice sequential growth.

In 1Q08, Nokia Siemens Networks (NSN) led the VoIP subscriber lines equipment market on a worldwide basis with a market share of 19.8 percent. That lead is followed by Italtel at number 2 and Cisco at number 3 worldwide.

NSN must have great confidence in the public Internet to tell Light Reading that it is planning a 400 Kbps real-time application service under a purely hosted model! We are still struggling with an 8 Kbps VoIP application over public Internet, guys.

IPTV offered like SaaS. That is not an alien concept. There are companies out there offering Over-The-Top IPTV service. However (1) they typically serve a particular small geography having bandwidth/QoS arrangements in place with the IP network provider, and (2) they tend to be smaller service providers.

• NTT VoIP subscribers: 5.7 million. NTT East 3.06m, NTT West 2.7m

• J:Com: 1.36 million VoIP subscribers. Added 193k subscribers during 1Q08

1&1
• Added 15kVoIP subscribers during 1Q08. At the end of March08, the total VoIP subscribers 1.91 million
• The number of VoIP minutes completed per month grew from 950 million to over 1 billion during 1Q08
• 1&1 uses open source platform to serve VoIP customers

Kabel BW
• Added 33,000 VoIP subscribers during 1Q08. Total VoIP subscribers at end 1Q08: 272,500.
• VoIP represents 12% of customer account penetration

Veraz media gateways and softswitch will to be deployed by Spice Telecom, cell operator serving two major states in India. Spice serves over 3 million subscribers and ranks among the top 6 cell operators of India.

Veraz has consistently been performing well in the wireless segment, which seems to be turning into the biggest source of revenues for softswitch and IMS vendors going forward. The chart below shows proportions of Veraz’s VoIP equipment that landed into wireless networks –across the last 4 quarters.

SFR’s takeover of Neuf, the largest alternative provider in Europe, was approved by the French authorities last month. SFR has been offering SFR One, a converged IP Centrex offering to SMEs. Neuf has SME VoIP offering of its own. Neuf Pass is based on Open Source PBX software which the service provider integrates with a CPE in order to provide SIP trunking service.

SFR’s convergence play is based on Thomson solution. Neuf uses SER open source VoIP platform.

Post acquisition, SFR is likely to choose just one of the two service offerings. The choice will be a strong indication of where the operators see SME VoIP moving. The deciding factor is perhaps going to be convergence rather than the Open Source issues. With a hosted Centrex offering - that SFR has in place – it is easier to enable convergence across a fixed centrex phone and a mobile phone. It is easier to achieve a single centralized voicemail and other features with a centrex setup. With a premise based PBX solution such as the one Neuf has in place, it is difficult to centralize voicemail and other features. It is also a challenge to offer value added services-from-the-cloud.

NTT DoCoMo has decided to take the WiFi route for its residential FMC service, Home U. The service provider today announced what it calls Japan’s first residential FMC service. Apparently the Femto option has been shelved for a while. This is in fact the second iteration of dual mode WiFi-GSM based convergence undertaken by DoCoMo. The first one was initiated 2 years ago and is targeted at the enterprises.

DoCoMo has been testing Femtocell based FMC for over a year now. It had plans to offer Femtocell based FMC service late last year. The absence of Femto in the Home U offering carries some meaning for sure. A DoCoMo contact says WiFi based FMC is more user friendly. However the Femto testing is still on.

There were estimated 69.2 million VoIP subscribers worldwide as of 1Q08. USA had the most subscribers (18.1m) followed by Japan (16.8m). France was at number three with 11.5m subscribers. Chart below gives VoIP subscriber numbers in top 10 countries.

There were an estimated 16.1 million IPTV subscribers worldwide at the end of 1Q08. More than half (estimated 8.4 million) were in EMEA, mainly the Western Europe. Asia Pacific has 5.6 million or 35% of the worldwide IPTV subscriber base. North America is lagging behind a little. However AT&T and Verizon (with its hybrid TV offering) in the US are likely to change that over the next two years.

Truphone has finally ventured into bridged mobile VoIP i.e. using GSM network for the last mile. In view of the limited WiFi coverage and problems related to VoIP-over-3G, it seems like a sensible thing to do. Mobile telephony arbitrage in form of mobile callback and bridged mobile VoIP is potentially a huge market to tap into and Truphone has to monetize its technology after all. I hope, however, that the story does not end here.

You could, like Jajah, try to generate meaningful revenues, but if you do not have the bells and whistles around your core offering, the industry interest and ultimately the investor interest just evaporates. Arbitrage is a bad long term business to be in. None of the resellers from 90s are in business anymore. Once the cell operators drop their artificially inflated rates for international calls, companies like Truphone could be in trouble. We are probably looking at around 5 years for cell operators to drop those prices. In the interim Truphone has to cook something appetizing. Something beyond cheap ILD calls.