Jim Courtney

Friday Update II - Struggling to Break the Mobile Oligopoly

October 1, 2006 07:12 PM

Topics: Business | Every Post | Ideas & Views | Skype杂志 | Strategy | ebay | observations | skype | skypejournal | voip

[Yes, I know it's Sunday! But I started to write this up Friday.]

The past couple of weeks has seen much higher visibility for attempts to duplicate the landline long distance calling revolution generated by VoIP technology in the wireless space.

First Jajah launched Jajah Mobile at DEMO Fall 2006, where a Jajah client on your mobile phone redirects any calls starting with, say, "+" or "00" via a VoIP-enabled  backend. Your cell phone sends dialing instructions via either a SMS message or a GPRS over-the-air data service to trigger calls which bridge your phone and the called party. The beauty of this plan is that it does allow you to continue using the standard dialing algorithm; however, there can be a 20 to 30 second pause while the bridge is established. Almost simple but not all the way there. Alec Saunders provides a more detailed discussion; Russell Shaw has nine reasons why it is not a threat to neither mobile carriers nor VoIP service providers; Luca agrees; Alec rebuts.

In a trial using my Jajah-supported Nokia N70, I found that the GPRS/EDGE/3G connection worked whereas via the SMS service it did not perform satisfactorily. It does have a problem recognizing that long distance calls to within North America ("+1") should be handled via Jajah.  They have assumed a U.S.-centric model where it is probably just as cost effective to use the various fixed monthly rate all-you-can-use plans available through U.S. mobile carriers; the Canadian mobile space is one where we still pay 10 to 25 cents per minute for long distance calls outside a local calling area. With their primary focus on the U.S. market Jajah Mobile sends all North American calls via the underlying wireless service, not the Jajah Mobile backend. To correct this they need to differentiate between US and Canadian phone numbers.  (This is easily done; Skype users may note that flags associated with "+1" phone numbers differentiate between Canadian and US area codes.) Calls using the SMS connection need some more work by the Jajah people to get the software right; Alec tells me they are aware of the issue and working on it.

Another service introduced at DEMO Fall 2006, Grand Central, offers "One Number for Life" designed to aggregate all your phone activities, including voice mail, ring tones, call blocking, call redirection and call recording. Unfortunately since it's only available in certain area codes in the U.S. the economic argument only works in the U.S. However, to get two sides of the picture read the comments by Alec Saunders, Andy Abramson who thinks "it rocks"; Ken Camp and Ted Wallingford who basically remind us not to forget the basics of consumer telephony and the potential of Voice 2.0 for the sustainability of its value-add. Ted sums it up with:

We need to focus on increasing ACTUAL functionality and lose the obsession with placing band-aids on the infrastructure of yesterday in order to save a half-cent a minute, which is the basis of these firms' business models. When clients ask me about VoIP, they always bring up carrier cost savings. That may've been the case in 2001, but it's getting tougher and tougher to make that case. So I switch them off of cost savings and turn them on to new ways of thinking about communications.

Thursday a Helsinki newspaper reported on an interview with Skype Founder Niklas Zennström where he mentioned Skype's frustrations with trying to develop a mobile phone VoIP client for Symbian devices (such as my Nokia N70 and N91). A few comments:

  • My network of contacts include a team that has successfully built a VoIP client for the Symbian OS. They tell me to speculate that Skype is potentially experiencing problems with both processor speed and latency issues; acceptable quality VoIP on mobile also appears to require the speed of 3G networks to handle all the necessary processing associated with transmitting and receiving voice packets.
  • It is known that attempts to use VoIP for "Push-to-Talk" services on 2G wireless mobile networks result in a noticeable and annoying 3 to 15 second latency as each party commences to talk. (These services are in high demand in service industries with dispatch-managed mobile work forces such as construction, landscaping and HVAC where wireless mobile emulates the operation of walkie-talkies.) Nextel's IDEN and, in Canada, Telus Mike services use a different wireless network infrastructure where latency is not an issue for "Push-to-Talk" services. As indicated in the referenced Wikipedia post, Sprint/Nextel and Telus would like to migrate these services to run over their CDMA service to eliminate the need to support a second network for their "Push-To-Talk" requirement. VoIP provides the potential for a solution but latency issues are holding them back.
  • Mobile VoIP is one application where WiFi currently has a distinct advantage over GPRS as the wireless communications method; I have not observed any latency issue running Skype Mobile from my Dell Axim over WiFi. With my dual mode Nokia N91 Personal Entertainment Assistant, I find that I attempt to wait until WiFi is available before downloading new programs, services and videos as any data service usage can run up the bill pretty quickly (especially when you are a Rogers customer). T-Mobile would appear to have it right as a starting point for using wireless VoIP if the rumor mill is true about their forthcoming launch of a service that uses traditional wireless network "on-the-road" and seamlessly transitioning to WiFi when entering a WiFi-enabled zone, such as at home. Later in the same post reference above Ted Wallingford sums it up with:

Think about the global adoption of WiFi systems. Think about WiMax. Ask yourself-how fast has consumer wireless (not carrier-based cell wireless) become pervasive? Consumer-empowering technologies (of which WiFi is the principle example) have exploded, to the detriment of the big carriers. T-Mobile hotspots? PLEASE. Those will be gone sooner if not later. WiFi is cheap to provide and free to consume. Ask yourself-how long can a solution which dotes upon the druthers of the slow, cranky, old-hat cellular carriers survive in an environment of increasing global consolidation of those carriers?

Wireless VoIP, whether from Skype or anyone else, is going to be a case of "walk before you run" in terms of its introduction into mobile communications markets. And it needs to address a mix of technology and business model issues as well as useful Voice 2.0 applications to be broadly accepted.

P.S.: Late breaking posts that came out while I was writing this: Andy Abramson I: Is Jajah leading towards a Plaxo mobile offering? Andy Abramson II: On Cooperative Technology with the conclusion:

But for these new 2.0 ideas to advance, at the end of the day they have to be favorable to the insider forces in power that really run the world of mobile telephony around the globe. Those groups are far broader in reach than the VC's and have more to do with what happens when, and are really at the heart of the key issues we all are aware of like the net neutrality issue, as well as these new advanced services offers, because both transcend economics, politics, finance, legislation, regulation and technology.

Alec Saunders questions Andy.

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Comments

Posted by: Paul Jardine [TypeKey Profile Page] at October 2, 2006 12:44 AM

Your second point about Skype being acceptable over a WiFi connection on your Axim, begs a question. Why is Skype wasting time trying to use the mobile operators network to implement their VoIP? If, indeed they are?
They should just stick to getting it to run on Symbian using WiFi. Don't even try to use the mobile data network - it will be marginalised soon enough anyway.
They may still have trouble with lack of processing power, but latency and bandwidth problems...who needs them!

Posted by: Jim Courtney at October 2, 2006 7:22 AM

Paul, that is one of the points I am trying to make. There is a reason I quoted Ted's comments re WiFi. Stay tuned.

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