Today one of my favourite mobile phone applications, Fring, got kicked by some VoIP experts. It was a classical blog circle, where someone throws a bone in the ring and the others can't hold back from chewing it through as well.

The starter was David Beckemeyer, alias Mr Blog. He is CEO of TelEvolution, the producer of the PhoneGnome, which connects normal phones to VoIP and to Skype. He got quoted by Andy Abramson, daily blogger and CEO of Comunicano, a Californian public relations firm. Another piece came from iotum's CEO Alec Saunders.

The circle of argumentation reminded me of what Thomas Anglero, yet another big VoIP expert, said in december:

As I read through the VoIP blogs, it is clear that VoIP bloggers and the VoIP community itself, does not allow for just anyone to become a member. VoIP bloggers talk about each other (over-and-over), and the VoIP development community only respects those who have done something so glorious before in code. This mindset will kill our industry.

Although blogs are open for comments and trackbacks, the matter of VoIP still seems so difficult to understand (or is it so boring?) that sometimes near incestual relations between blog posts arise. Today everyone seemed to agree on that Fring sucks. Which I see totally different. That's why I feel the need to comment it in my blog as well.

Andy Abramson said:

I think Fring is cool, but I question its utility, especially in GPRS and even EDGE markets where the audio sounds so muddy that its not what you would want to use for a business call.

And David Beckemeyer:

Like many other cell phone users in the US, I have GPRS data service rather than a true 3G data service with my carrier. My first experiences with Fring over GPRS were not very good.

Alec Saunders followed up by criticizing Fring's monetization strategy, arguing that Fring might have some cool features but the guys don't know how to make money with them.

I think they all have lost the point: Fring is the best application to control nearly all important chat and VoIP applications together in just one program. In Europe the mobile networks are as fast as DSL connections. Fring's voice quality is no big deal anymore.

Also you have to see that Fring is much more than a VoIP client. In fact you don't need an extra VoIP client on Wifi enabled mobile phone. The congfiguration of a Nokia E61 is fairly easy and there are loads of web pages which explain how to do it.

The really cool feature is that Fring is a chat client for MSN messenger, Google Talk and Skype at the same time. It is the only way to bring Skype on a Symbian phone and on my Wifi the Skype calls sound great. Isn't that marvelous? I even tried in on GPRS. The voice is understandable. Only the delay is too long.

I use Fring to chat with my buddies. We send text messages instead of SMS. One SMS costs me 15 Euro Cent. But for the same price I can send thousands of chat text messages, since my no frills mobile operator Simyo charges only 24 Euro Cent for 1 MB. Overall I will have to pay 2 Euros for GPRS this month.

Thanks to Fring.

(Disclosure: I work for none of the companies mentioned in this blog post.)

Labels: Fring, Google Talk, Mobile, MSN messenger, Simyo, Skype, VoIP

                                      

I really like the term „minute stealer“ that Andy Abramson and Om Malik brought up. It explains in a very short way that VoIP companies like Jajah, Rebtel, Cellity, Truphone and others take shares of the telephony market from the well established, often monopoly like, old phone companies and make calls cheaper by tunneling them trough the internet. In the last months we should also speak of „mobile minute stealers“ since they do it also with cell phone calls that are even more expensive.

This is a great opportunity and so I wonder why nearly none of the new companies wants to call themselves a „minute stealer“. Are they afraid of waking the sleeping enemy?

Last week I researched for an article in a German economy magazine and talked to many important people in this market: Ari Virtanen (Vice President Convergence Products, Multimedia of Nokia), Eric Lagier (Head of Mobile Business Development at Skype), Roman Scharf (CEO of Jajah), Alexander Straub (co-founder of Truphone), Hjalmar Windbladh (CEO of Rebtel), Tim von Törne (co-founder of Cellity) and also to analysts, users and cell phone companies. Most of them say that they are no „minute stealers“ and no danger to established cell phone companies.

„A survey showed that 55 per cent of all Skype users never made a international mobile phone call“, told Eric Lagier from Skype. „So Skype is no competition to the mobile operators. If theses people now use Skype mobile to contact their friends abroad this does not take away mobile minutes from the operator.“ He refered to Skype on Wifi PDAs and Skype on mobile phones which „3“ offers together with an unlimited data deal in the UK and soon in Sweden and Denmark.

A similar contained comment came from Tim von Törne, co-founder of Cellity, which tunnels cell phone calls for small prices trough fixed phone lines: „We don't steal minutes, we only lower the prices.“ The rest of his argumentation was nearly the same like Roman Scharf's from Jajah: „With Jajah the mobile operator does not loose his client. He only does some international mobile calls with us but the operator can still bill him the local calls and the base fee.“ Then he passes the bill to others: „The real threat are Wifi phones because they bypass the mobile operators at all.“

Nicely put. So Nokia, which is the actual market leader for Wifi/GSM mobile phones, must be in trouble with Vodafone, T-Mobile, O2 and other mobile operators. Until now they are Nokia's biggest clients, but the new cell phones like E61, E70 or N81ie make Wifi calls possible and allow the easy installation of services like Jajah and Cellity which must hurt them. Does Nokia leave a sinking ship, with everytime smaller margins in the mobile phone industry, to concentrate with it's Wifi/GSM phones on the office market with its gross margins?

„Nokia has not changed it's strategy“, said Ari Virtanen, Vice President Convergence Products, Multimedia of Nokia. „I cannot see any conflict between Nokia and the mobile operators because of the Wifi capabilities.“ Really? I can't believe it. In Germany you can buy the E61 for 1 Euro together with a cell phone contract. „Most heavy mobile phone users spend 80 per cent of their time in Wifi areas: at home and in the office“, says Harry Behrens, CEO of 4S newcom. „Why should they use then expensive mobile phone connections when they can call with the same device nearly for free on Wifi?“

Sounds logically to me, a perfect „minute stealer“ scenario.

You have to keep in mind that people who download music for free instead of buying it on CD are persecuted and called thiefs. Even if they wouldn't have bought the CD anyway. So in music a person who uses an alternative way to access to songs is a „music stealer“ and a danger to the industry. But in telecommunications a person who uses an alternative way to access to mobile communication for free is no „minute stealer“ and no danger to the industry? Not quite convincing.

I agree more with Rebtel's Hjalmar Windbladh who said that „today's prices for mobile internet, mobile international phone calls and SMS are a daylight robbery“. Companies like Vodafone pay only 0,8 Euro Cent a minute for a mobile phone call from Germany to China, he explained to me. „So why do they cash 1 Euro or more from their costumers?“. This „toxic pricing“, as Windbladh calls it, brought in the „minute stealers“ like Rebtel which can connect the same phone call for some Cents. At least Alexander Straub of Truphone was not afraid to tell that „we are building our own network which allows free mobile phone calls worldwide.“

You companies ARE stealing minutes and you do quite a good job in it! When I compare your prices with my normal cell phone costs they can save me between 50 and 90 per cent. Be proud of it and don't hesitat to use the name „minute stealer“!

The network operators have understood your business anyway and they already have you on their radar. Rolf Hansen, CEO of the German MVNO Simyo even recommends to use Jajah for international calls since he cannot lower their prices in the near future. Vodafone, E-Plus and T-Mobile told me that they don't see you as a danger since you are still so small. But you will not be forever.

But maybe these companies just want to stay under the radar and don't want to attract too much attention. Their businesses live from very small margins on the phone minute. Often it's far less than a Cent. The big companies can push them out of business by just lowering their prices a little bit. Or they do it like AT&T which with one stroke of a feather created the largest unlimited calling community in the US: 100 million AT&T wireless and wireline phone numbers can call each other now for free.

Who will install then the software of the „minute stealers“ on his mobile phone?

Labels: Cellity, Jajah, Nokia, Rebtel, Simyo, Skype, Truphone, VoIP

                                      

Jan Michael Hess from Berlin, Germany, is preaching the "Open Mobile Economy", yet for quite a long time: Open mobile networks, open services and open devices. This means basically that mobile network providers, like Vodafone, provide their mobile internet bandwith for reasonable flatrate prices and their costumers can do with it whatever they want. No closed portal sites on mobile phones, no VoIP blocking and no exorbitant data prices for SMS, because people write mobile e-mails. Just plain internet access everywhere and using Flickr, Google, Skype and Youtube like you do at home.

A nice dream so far. Others are even dream of a "wireless net neutrality".

But Hess knows that it could be possible. It seems to be an open secret that mobile 3G networks have about 90 per cent unused data capacity. People shy away from using them because of the high data prices. So it is a good move that the German MVNO Simyo recently cut his data prices by 97 per Cent. The mobile Megabyte now costs only 24 Euro Cent. But this is still no "Open Mobile Economy" since it is no flatrate and the service works only on a GPRS network and not in 3G. Most mobile network operators still prefer unused business opportunities instead of giving mobile internet access for a low price. That's because they paid billions for their 3G frecuencies, rollout and hardware subsidies.

But maybe a new technology, Wimax, will bring the story to a good end and the "Open Mobile Economy" will finally arrive? An article by Michael Mace tells a things about the US mobile network operator Sprint that are nearly unbelievable:

Yes, I know Sprint's serious about WiMax -- it's spending more than $2.5 billion to build out a mobile WiMax network across the US. That's old news. The surprise to me is the business model Sprint says it'll deploy on that network. That hasn't gotten much coverage at all, but I think it's critically important. If you believe what Sprint says, its WiMax network will be totally open: any device, any application, without any contract required.

As you probably know Wimax is something like Wifi but faster and with much broader coverage. While Wifi cells cover only some meters of area Wimax cells can be some kilometers wide. The bandwith can compete with fixed broadband access and is much faster than nowadays 3G. The first Wimax equipped laptops, PDAs and mobile phones are being presented in these days at the 3GSM World Congress 2007 in Barcelona. Wimax is like DSL but without wires. That's why it's often used to bring Broadband to rural areas. Sprint has already announced to build out a nationwide WiMax network across the US.

Michael Mace is an industry insider and principal at Rubicon Consulting. He summed up some information he got from companies, news and an interesting panel discussion:

Okay, so let's add this up: an open, broadly-deployed, high-speed wireless network that welcomes any device, open APIs that allow any application, and no contract required. This is everything that the computer and Internet industries have been asking of the operators, and Sprint is apparently saying yes to all of it. The audience at the Churchill Club should have given this plan a standing ovation, but the information came out in dribs and drabs during a 90-minute panel, and it was very hard to assemble all the pieces.

The killer app is open access to the Internet.

That seems to be the "Open Mobile Economy" that Jan Michael Hess and others have prayed for so long. Will it finally arrive, bypassing the mobile phone companies? Wimax works in other frecuencies that were much cheaper than those for 3G. Other, smaller companies have got them.

Maybe we finally get our open mobile broadband for reasonable prices?

It would be very funny to also use it for phone calls.

Labels: Broadband, Google, Mobile, Open Mobile Economy, Simyo, Skype, Wimax, Youtube