VoIP Redux

VoIP is back in to the big league, and who else to be in the spotlight, other than Skype! Skype has been the poster child for the VoIP brigade for quite a few years now. However, most, including me, were disappointed to see Skype find its way into eBay, for there were evidently very little synergies. Indeed, one could vividly recall some of the rather wierd monetization options that eBay could conjure up for Skype, including one in which they considered selling ringtones for Skype calls ! Finally, it appears to have dawned on eBay after over four years that they are better off focussing on their core auctions and e-commerce enablement area (the irony wasn't lost on anyone on how eBay had paid significantly less for PayPal). Nevertheless, to eBay's credit, it has let the company quietly grow in to a potent service that is now looking at hitting a $1 Bn revenue run rate and clocks over 2 Bn paid minutes. What is interesting is that eBay has retained a stake in the company, and the surprise entrants back in to the company are the original (ruthless?) entrepreneur duo who founded Skype.

However, more than the intricacies of how the deal is structured, the deal and its size throws the spotlight back on the VoIP industry. Despite its immense potential, VoIP hasn't really take off in a manner befitting. While Skype has seen success with consumers, however, the real challenge, and the big monies, lie in encouraging enterprises to sign up. The VoIP space is beginning to see renewed traction with competition in consumer VoIP picking up. Nimbuzz recently launched its paid calling service, 'creatively' called Nimbuzzout. Google's Voice service, while not being a full-fledged VoIP service, however, lays bare the Internet giant's intentions for this space. And with rumors flying around of Google's acquisition of Gizmo5, one can be rest assured of a shakeup in the VoIP industry. On the carrier side as well, there appears to be some movement. AT&T has decided to allow VoIP calls over 3G, a point of much contention when Skype for the iPhone was released.While carriers around the world have agreed on the One Voice standard making all future mobile calls VoIP, however, full-scale LTE deployment is a while away.

VoIP, and more so mobile VoIP, appears poised for an interesting future. Having come in to mainstream when mobile ecosystems were tightly closed and , mobile VoIP has historically been limited in its ability. However, recent developments which are progressively breaking down carrier walls, opening up of operator APIs and creation of innovative platforms, such as the one offered by BT's Ribbit, create the potential for an exciting and innovative future.

Update 1: The current spate of action in this space ain't done yet, apparently. Techcrunch is reporting on a possible acquisition of Jajah, and for a change, we finally have a telco in the fray.

Update 2: The news about Google acquiring Gizmo5 indeed turned out to be true. Should be quite interesting to see how Google Voice evolves, now that they have access to a strong SIP platform and a PSTN termination link. More importantly, the prospect of a communications platform that integrates IM, Mobile, Location and uses SIP as the backbone indeed opens up exciting possibilities for realizing the unfulfilled dreams of unified communication. Telcos, watch out!

Voicing its way ahead

It appears any and all news in the online world in the recent past has been doomed to be focussed on the GoogApp duo ! Be it Apple' announcement on its new iPhone OS or Google's launch of a souped up Grand Central or the more controversial move to have behavioral targeting in adsense !   

Google's frontal move into voice appears, as always, ominous to the telcos that have hitherto survived in locking out users in closed environments. Google's attempts to open this ecosystem up, with all its efforts on spectrum/platforms/handsets, whilst having minimal immediate real impact, are however forcing telcos to go in directions that they have resisted up until now. Whilst Google has thus far restricted itself to what can best be described as Guerilla tactics in targeting telcos, Google Voice goes a step forward and takes the competition right into the backyard of the operators. With free domestic calls in the US, and low rate international calling, Google appears to be looking at a revenue stream that goes beyond its staple diet of search advertising. Of course, directory services will likely be a focus and be tightly integrated with Google Voice. However, I am more inclined to look at this launch as an acknowledgment of the fact that establishing platforms and ensuring Android based handset uptake grows is an uphill task. In its home market, Google is yet to tie up with the top two operators for the Android platform. And with the global handset market showing clear signs of losing steam, mobile advertising could take that much more time in becoming mainstream. And it is in this backdrop that Google's launch of Google Voice appears all the more interesting. Instead of building an ecosystem that is favorable to its core business from ground up, Google appears to have realized the advantages of taking a multi-pronged approach that effectively uses their repertoire of acquisitions.   

Telcos will definitely not be pleased with Google's latest move. However, there's little that they could do, other than accept the fact that their distance from the consumer is rapidly increasing. Being a dumb pipe now appears to be thrust upon them, even when it comes to delivering their core service, voice!  And while the extent of upside for Google is debatable, what appears certain is the downside for telcos that competition of this nature is likely to bring to the overall telco industry.