Truphone does the sensible thing
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.
I would suggest two areas to concentrate on: (1) productize its platform and team with the operators and be part of telco 2.0 programs even if it might take a couple more years to monetize those relations. (2) Speed up the developer program of its own. Perhaps another acquisition – since it has money in the bank - in form of a mobile VoIP player that has hooks into certain IM clouds could bring in a decent sized developer community. Another option in terms of acquisitions is an enterprise FMC player that takes Truphone offering inside small businesses.
If Truphone is to become a major acquisition target five years down the line, it has to make sure that it does not repeat the mistakes that Skype made. A higher margin converged business offering should be on top of the list therefore. Truphone cannot afford to rely on the off-net termination revenues for long even if such services are used by a hundred million users.
In drafting the business plan for the next five years, the foremost question Truphone should address is this: What is wrong with Skype?
