Tech Untangled

A Boston-based company called MobileSphere has just announced a service called Slydial to send a voicemail to any mobile phone in the U.S. without having the risk of the called party answering the call. Anyone can send a voicemail by calling 267-SLYDIAL (267-759-3425) and entering the phone number of any U.S. mobile subscriber. The service is free, but you have to listen to a 10-second audio advertisement.

What MobileSphere has done is to figure out a way to connect you directly with different U.S. cell phone providers voicemail systems.

So why would anyone want to use this? MobileSphere is marketing Slydial as a way to avoid unpleasant conversations, annoying people, or any situation where you might have to take responsibility for something.

Here are some reasons to use Slydial:
* Calling someone you know is busy or at a meeting and doesn’t want to be disturbed
* Calling an annoying person who likes to talk too much
* Calling someone to dump them or to quit a job (rather than end up having an unpleasant conversation)
* Sending a quick message to a friend
* Leaving a quick message for your spouse when you are too busy or dont really want to talk (think about it….do you really want to call ‘honey’ at home just to get chores assigned to you.. as in “hey honey, can you pick up a milk on the way home”)

However, this capability already exists - many, if not all, wireless carriers provide a voicemail access number where one can leave a message in another subscriber’s voicemail box. For example, with Sprint, you can dial the NPA-NXX-6245 (area-code and exchange followed by 6245), and send a message to a Sprint mobile number without having to enter a password. Other providers have a similar voicemail access numbers. I tried this from one of my Verizon Wireless phones to another Verizon Wireless mobile number and it works perfectly.

Basically, Slydial have figured out a way to enable a hardly-known feature, thrown advertising with it to make money, and are marketing it  …SLY….really SLY!!!

Harris Interactive, a market research firm, has conducted a survey of 9,132 adults conducted in 4Q of 2007 to find out the telephony usage patterns of U.S. adults. The survey shows that about 14% of adults are cord-cutters, up from about 10% in 2006. The percentage of adults with landline phones has dropped slightly to 79% from 81%. This shows that the number of people who use a cell phone exclusively for voice communication (i.e. have no landline phone), also called cord-cutters, is increasing.

The Chart and the table below show the telephony usage patterns among U.S. adults, as depicted by the survey taken in Q4 2007 through Q1 2008.

(source: Harris Interactive, techuntangled calculations)

T-Mobile USA has launched a wired phone service for $10 a month, plus taxes and fees, to its wireless subscribers in the Seattle and Dallas-Fort Worth areas. The service, called “Talk Forever Home Phone”, comes with unlimited local and domestic long distance calls. This is a VoIP service that runs over a broadband connection, and in that sense, it is similar to VoIP offerings from the likes of Vonage. Talk Forever Home Phone will likely be available nationally in a few months. It works via a special Wi-Fi wireless router that you must buy, with a two-year contract, for a $50 one-time fee . The router has two phone jacks to connect 2 standard corded or cordless phones. The router can either replace or supplement your existing wireless router and connects to the T-Mobile cellphone network. No other hardware is required from T-Mobile (e.g. you can use your own cordless or corded phones with it).Talk Forever customers must be on a T-Mobile individual plan costing at least $39.99/monthor a family plan costing at least $49.99/month.Talk Forever Home Phone has some significant downsides. It doesn’t support faxes, home-security systems and other devices that rely on dial-up modems. Also, unlike in POTS phones, your home address is not automatically transmitted to 911 emergency centers - the customer has to manually supply that address to T-Mobile during signup (and then change it whenever the address changes). This issue exists with any residential VoIP service. Cord-cutters can transfer their landline phone number to this new service, but it cannot be shared with the T-Mobile cellphone number. Also, the cell phones addressbook doesn’t transfer to the home phone (after all, addressbooks are generally local to the cellular handset).

This is similar to T-Mobile’s HotSpot AtHome program, which allows subscribers to place calls over their broadband connection using special Wi-Fi-equipped cell phones. The difference is that HotSpot AtHome uses the cell phone, while this Talk Forever Home Phone works with any standards corded or cordless phone. In both cases, T-Mobile is trying to get more people to give up their traditional landlines, but the new plan allows them to keep the familiar home phones as well as the home number.

Again the biggest losers out here will be pure-play VoIP providers such as Vonage! Not that there’s a complete overlap, but T-Mobile is positioning itself to carve out a chunk of Vonage’s customer base. This is waaaay cheaper than Vonage (doesn’t have all the features of Vonage, though) and will provide a better value proposition for those looking for cheap home service AND a mobile solution (users will have one bill for both at home and on-the-go voice service). Plus T-Mobile can market this cheaper than Vonage can because it already has a bigger customer base.

No doubt that this will be another nail in Vonage’s coffin - Vonage will now have to work even harder to survive

Verizon Wireless introduced an unlimited calling plan for $99.99 a month on last week. Verizon Wireless is the first major carrier to make an “unlimited” plan available nationwide with no domestic roaming or long-distance fees. At that time, it must have seemed like a good plan to upsell subscribers to “move up” to the unlimited level, including possibly getting new customers from the other cellular carriers, and to create some extra ‘buzz’.

However, not even a mere five hours had gone by when AT&T announced its own unlimited plan. Three hours later, T-Mobile announced its own unlimited $99.99 a month plan, which even included unlimited text and picture messaging, which otherwise costs an extra $14.99 per month when added to other T-Mobile plans. In the end, only Sprint Nextel hadn’t announced a matching plan, and the stock price of all U.S. mobile carriers had taken a dip.

This is far from a historic day in Wireless. This is merely putting a cap on the high end charge. Given that wireless carriers have a monthly ARPU (Average Revenue Per User) of around $50, it is clear that only a small percentage of customers subscribe to these high-end plans. Of course, one could expect more customers to move to the new unlimited plan, but even that would still be a small number. However, for those high end users, this will increase the rate at which they cut the cord and use cellular exclusively for their voice communication needs.

So why did the stock prices of dip so much?

Curiously missing from this picture is Sprint Nextel. Sprint has been trialling an unlimited plan for $119.99 a month (includes unlimited Web use, e-mail and messaging) in Philadelphia, Minneapolis, Tampa, and parts of Northern California and Western Nevada since May 2007. Sprint is looking at how well the offer is doing in the trial areas, and unfortunately for Sprint, this ‘looking’ has been mooted by the other 3 rivals. Given the recent customer losses and with no apparent advantage over AT&T and Verizon Wireless, Sprint will likely have to offer a cheaper plan, to stem the defection of customers. The dip in the stock price probably implies that Sprint will undercut very aggressively and that AT&T and Verizon will eventually be forced to respond. Rumors are that Sprint will undercut its rivals with a flat-rate calling plans that is as low as $60 a month. If AT&T or Verizon are forced to match a $60 to $80 plan, it can significantly cut industry-wide revenues and potentially sets a dangerous precedent towards downward spiraling price plans.

One way or the other, the actions by AT&T and T-Mobile show that nifty price plans no longer provide an advantage to any carrier. So why was this done in the first place?

Perhaps Verizon Wireless wanted to pre-empt a price cut by Sprint. Or perhaps it was a plan to kill-off Sprint Nextel. After all, Sprint is struggling and what better time to attack it than while its down!!! But now it may find itself in a downward spiraling pricing game that the industry is ill-designed to match. Nonetheless, if anyone is able to withstand price-cuts, it must be Verizon Wireless, because it has the higher margins that both Sprint Nextel and AT&T.

  Netzero has decided to shut down its PrivatePhone service on February 19, 2008. Subscribers of Netzero’s PrivatePhone can keep their number by transferring the service to Packet8. Netzero has worked out a deal with Packet8 to transfer existing PrivatePhone numbers to Packet8 at a special price.

What is PrivatePhone? PrivatePhone is a free phone numbers with voicemail - in other words, a free voicemail service where all incoming calls are diverted to a voicemail number. The customer is notified of voicemail via email or SMS/text. Customers can check voicemail via the web or by calling the PrivatePhone number from any phone. Each customer can store up to 10,000 voicemails.

PrivatePhone was billed as “Just a life-changing social tool and revolutionary movement all rolled up into one”. The proposition being that it is another number one could give out to for specific purposes (e.g. hotties, potential employers, etc). Netzero envisioned this as a social networking opportunity, thinking that people would leave cool voicemail messages, which then could be embedded on a Myspace, mashed up with Gangsta rap, or do something ‘kewl’ in the social networking space.

It didn’t strike me as a valuable social networking concept and I always wondered how feasible this free voicemail service would be. The revenue model seems to be based on advertising and perhaps by selling people’s email addresses (??). Even though the website was supported by advertising, subscribers didn’t have to utilize the website, as they could simply check voicemail by phone. In fact, regular users would find it a lot more convenient to check voicemail by phone!

Hey, this was a free phone number and probably the main reason people signed up. So I doubt subscribers will migrate their phone number to Packet8 and convert it to a paid service. That’s one of the pitfalls of offering free service - once you offer something for free, it’s very hard to charge for it. Of course, in this case, Packet8 service offers a lot more than a phone number with voicemail.

Last month, I wrote that US Voice over IP (VoIP) subscriptions are skyrocketing. That was about VoIP in the U.S., but the VoIP story around the Globe was no different. Worlwide revenue from retail Voice over IP (VoIP) services almost quadrupled (4x) from $1.834 Billion in 2005 to $6.908 Billion in 2006, according to research by Point Topic.

North America, with the third highest number of VoIP subscribers (8.6 million), generated $2,411.7 million in revenue. Western Europe, with the highest number of VoIP subscribers, generated $2639 million in revenue. The Asia-Pacific region, a close second in terms of VoIP subscribers with about 14.5 million generated $1750 million,

Interestingly, North America had the highest Monthly average revenue per user (ARPU) at $20. Western Europe and South and East Asia had comparable ARPU at $15, while both Asia-Pacific and Latin America had an estimated ARPU of $10.

While some of the better known U.S. based VoIP providers, ala Vonage and Skyrocket, may bring up concerns about the viability of VoIP (and there are strategic issues with standalone VoIP service), VoIP is a phenomena that is here to stay - primarily because of the cost advantages and the flexibility and extensibility that comes with IP technologies. The cost advantage is because an IP network can be shared by multiple services or in other words, IP allows multiplexing of services. For example, with an IP network, a user can have both a VoIP session and a Web browsing session at the same time (whereas with traditional circuit switched voice service, both voice or fax cannot be used simultaneously on one connection). The flexibility and extensibility comes from the ability to transform voice into multimedia seamlessly as well as transform the service experience with enablers such as Presence.

Fixed-mobile convergence (FMC) and the quest to make quick, smooth hand-offs between cellular and WiFi got a shot in the arm when Agito Networks formally launched this week. Agito Networks is founded in 2006 by Pejman Roshan (VeeP of marketing) and Timothy Olson (CTO), both formerly of Cisco’s Wireless Networking Business Unit, and backed by $9 million in investments led by Battery Ventures.

FMC is one solution to spotty cellular RF coverage within buildings (another answer is Femtocells, which Sprint Nextel launched recently). Furthermore, FMC helps leverage the increasing number of WiFi networks in offices and hotspots to make low-cost VoIP calls.

So why jump into a pit with hundreds of FMC players such as Tecore, T-Mobile HotSpot@Home, Kineto Wireless, LongBoard, and Motorola? Turns out that no-one has adequately solved the problem of transitioning from cellular to WiFi quickly and smoothly.

Agito Networks claims to achieve sub-second handover between WiFi and cellular RF networks through a patent-pending location-aware technology that utilizes RF to tell when an individual is approaching “predefined points at an enterprises WiFi coverage edge” after which a mobile-based client cooperates with a RoamAnywhere router (which integrates with the company’s IP PBXs) in order to hand the call over.

Agito Networks’ is targeting its products at medium-to-large businesses looking to save on cell phone bills – Agito claims a 60% reduction in phone charges by routing in-building calls over dedicated IP infrastructure and connecting outgoing calls originating indoors over VoIP.

Agito plans to introduce models ranging from $9,995 to $24,995 in the US later this year. The RoamAnywhere 2000 series Router is designed for small to medium deployments and scales to 100 simultaneous users per appliance, while the 4000 series, designed for medium to large deployments, can handle up to 1000 simultaneous users..

Agito also provides “Zero touch” client deployment which helps administrators to pre-provision groups. In addition, the location-aware policy engine enables users and administrators to create and enforce corporate-wide mobile policies. The Network/IT Admin can even set up RoutePoints and instruct calls to be directed to voicemail when users are off duty.

Seems like an interesting approach – but the FMC space is still at the early stages and feasibility cannot be assessed until products/trials are available.

Jaxtr has raised a $10 million Series A round led by August Capital with Mayfield Fund, Draper Richards, Draper Fisher Jurvetson and Luxemburg-based Mangrove Capital participating. Jaxtr’s registered user base has been doubling every month since its March launch. Most recently, it jumped from 500,000 to 1 million in just 27 days. So, it’s no surprise that Jaxtr needs more money to continue its expansion.

The interesting thing is that three of the investors, Draper Richards, Draper Fisher Jurvetson and Luxemburg-based Mangrove Capital, were early investors in Skype. Overall, there’s a lot of venture capital flowing into voice startups. Rebtel grabbed $20 million, Truphone collected $23.4 million, Jajah hauled $20 million, and last month newcomer Ooma topped the list with $27 million.

Why would the same folks invest in Jaxtr? Does Jaxtr have a better future than Skype? The investments indicate that Venture Capitalists, who have insight into these companies and know the market, feel that the voice market is still up for grabs. Perhaps they feel that Skype can be beaten at its game, especially since Skype is not a great solution for mobile phones and seems to be losing its way at EBay.

Here’s the thing. In the voice world, the mobile phone is king, primarily because of the anywhere, anytime convenience of mobile service. Whoever makes voice easy to use (and cheap-er) on mobile phones will be king.

It’s clear that Skype is not this king. Skype has made little progress with being on mobile devices because Skype requires a special client and it is very difficult to facilitate mobile clients. For one, users don’t know how to and cannot be bothered to download and install a client on their mobile device. Second, a lot of wireless phones are pretty much closed to unsanctioned 3rd party applications. More reasons can be found at 4 Reasons You Won’t Have Skype On Cell Phones Anytime Soon.

On the other hand, Jaxtr gives users a unique phone number and web address, so a mobile user can make and receive calls without any special software on a cellular phone, like Skype, or without having to access a web browser, like Jajah. The numbers show this too - Apparently, between 70 and 80 % Jaxtr calls involve a mobile phone.

Jaxtr will incorporate advertising into its services and may also pursue new services on social networks. Longer term, Jaxtr plans tiered monthly minute plans like that kind available today with cell phones. Jaxtr also plans advertising within user accounts. Jaxtr hopes to get 20 million users in the next twelve months and expects around one percent to purchase for additional minutes.

This indicates that Jaxtr has an uptapped market that Skype cannot easily reach. Especially with EBay fumbling with the Skype acquisition (EBay’s acquisition of Skype never made much sense to me). My bet is that Jaxtr will give Skype a run for its money!

Ooma just announced that it is taking pre-sales orders for the ooma Hub™ and ooma Scout™ in advance of the company’s consumer release slated for September 2007. Pre-sales orders will have for first priority fulfillment next month when the company opens up the online store.

Pre-sale Ooma systems come at the introductory pricing of $399 for a ooma Hub™ and $39 per Ooma Scout™ device. However, buried within this announcement (thanks Mike P!) is the news that Ooma is planning to increase prices!!!!!! Here it is:

In 2008, when the introductory pricing period expires, the ooma Hub™ device will carry a suggested retail price of $599.

I’ve had some concerns about Ooma, as outlined in Wanna get Ooma, Be Careful!. I’ve also outlined a preliminary comparison of Ooma and Skype, concluding that Skype is a better alternative for most people.

$600 for a device for free domestic long distance!!!! One has to have a really long investment span to see how this becomes a better value proposition than something like Skype. Frankly, I don’t see many users flocking to this anymore!

Ooma is just getting ready for lift-off and somehow I feel that it’s quickly forgetting about the consumer and thinking only about its profits (or perhaps the VCs are trying to cash out quickly). Or better yet, maybe Ashton is trying to Punk’d the general public this time!

It was a sad fate for Amp’d.

On the other hand, the future for Prexar Mobile looks brighter than ever. Here’s why; Prexar Mobile, a small mobile virtual network operator managed by a nationwide CLEC, says it has signed a deal to acquire Amp’d Mobile’s customers. Prexar is hoping this move will help its nationwide expansion.

Amp’d Mobile customers have been notified of the option to switch via a series of 5 text messages. Prexar says that its customer service centers have already been “pounded” with customers calling and signing up. No surprise there because Prexar has only about 15,000 wireless customers, and it probably has very minimal customer service agents. Amp’d had about 200,000 customers, and with all of them without service and probably desperately looking for an alternate provider, it’s no wonder Prexar’s customer service is getting pounded. Amp’d Mobile customers better move fast.

Good thing is that customers will be able to keep their handsets, except those who have the “Hollywood” or E816 or from Motorola. Those customers have to buy a new phone. Since Amp’d was on Verizon Wireless, it would seem logical that Prexar is on a carriers that uses the same technology (CDMA2000), otherwise subscribers wouldn’t be able to use the same wireless device. According to Prexar’s Web site, the company “provides service on the same network as Amp’d” Since they don’t explicitly call out Verizon Wireless, it’s probably not (but they wouldn’t want to spook customers by saying its not). Prexar most likely is on Sprint, a MVNO friendly carrier, or perhaps on Alltel or U.S. Cellular.

Prexar goal is to help Amp’d Mobile customers retain voice and text only at first. Prexar doesn’t have the fancy schmanzy services that Amp’d had, but it says that is working on a longer-term plan to add a content delivery system. Amp’d Mobile’s vast content library is on the auction block, and I doubt Prexar will purchase those rights for a small number of subscribers.

Interestingly, Prexar’s calling plans are much higher than what Amp’d offered and are similar to what the majors offer. The main difference is a two-step billing process where it bills in advance for the base plan and for usage in arrears. Here’s Amp’d Price Plans:

And here’s Prexar’s calling plans

First these customers got Amp’d (and you thought that was a good thing), but now they are getting screw’d by Prexar’s price plans. At these price plans, why not join a major wireless operator such as Verizon Wireless or Sprint?