Ooma to Raise Prices

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!

Amp’d customers keep getting screw’d

prexar_mobile_logo.JPG 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:

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And here’s Prexar’s calling plans

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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?

Why Skype is Better than Ooma


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Ooma has a lot of buzz and hype around it, despite still being in private beta. But let’s look beyond the hype and compare Ooma with other telephony services. I’m specifically choosing Skype although there are other players to consider. This will give a good idea how Ooma stacks up against Skype and for who Ooma may make sense.

First, looking at features, both Skype and Ooma offer unlimited calls to telephone numbers in the U.S. and voicemail. In addition, Skype has a nice colorful user-interface where you can set your presence status and see your contacts’ (buddies) presence status. There’s also Instant Messaging (IM) capability, and the ability to call both telephone numbers and buddies, no matter where they are in the world. While Ooma charges for all international calls, Skype only charges for International calls to telephone numbers (calls to buddies anywhere are free). Skype also higher voice quality because it uses high-quality codecs (e.g. iLBC) that provides better than toll-quality (what you get with landline phones) that is even good for music. The good thing about Ooma is that you can just use a single telephone number to reach all the contacts (kinda sorta like GrandCentral). Whereas for Skype, there’s a buddy name and a telephone number.

Also, neither offers 911 service, so you still need a local service for 911. In addition, Ooma users your local telephone service. Of course, a broadband service (e.g. DSL, cable) is also required.

Next, Ooma has several concerns about it service, especially relating to privacy. It’s all on this page, and there’s no need to replicate it.

Last but not the least, lets look at price. Ooma costs a flat one-time fee $399. There’s talk about a monthly charge for premium services, but that’s in the future so let’s ignore that for now. On the other hand, a Skype-enabled cordless phone or a WiFi phone costs about $150 (the Netgear WiFi Phone is $120 after a mail-in-rebate). The SkypeOut service to call anyone in the U.S. and Canada is $29.95 per year. SkypeIn (so your buddies can dial a phone number to reach you) with Voicemail costs $60 per year. That’s $90 per year or a whopping $7.50 per month. The cost of a Skype system is even cheaper, considering that Ooma costs up front and Skype costs on an annual basis. Skype devices also come with some nice extras – the SMC WiFi Phone ($160) comes with a free FON WiFi Router and + 12 months of Skype Voicemail. You can use the WiFi router for other purposes as well and comes with a revenue-sharing opportunity.

The break-even price is about 3 years. In other words, Ooma is cheaper if you keep it for more than 3 years. Till then, Skype is the cheaper option. Overall, Skype is a better option for most people because their time-span for electronics is less than 3 years. Three years is a long time – people tend to break things, want to get new stuff, or wont have the receipts when equipment breaks down

Anti-Caller ID Spoofing Law to put a few companies out of business

About a month ago, the United States Senate Committee on Commerce, Science, and Transportation passed S.704, the “Truth in Caller ID Act of 2007”, a bill that would outlaw causing “any caller identification service to transmit misleading or inaccurate caller identification information” via “any telecommunications service or IP-enabled voice service.” Essentially this bill makes it a crime to spoof caller ID.

This bill doesn’t outlaw caller-ID blocking (and that’s a good thing), but makes it unlawful for anyone in the United States to use misleading or inaccurate caller ID information in connection with any telecommunications service (including Voice over IP ). For example, all those prank calls you made to your friends with the Caller ID “Dept of Homeland Security” will be illegal. Law enforcement and court ordered authorizations are exempt. A similar bill was recently passed in the U.S. House of Representatives, making it a real possibility of becoming law.

I really like this idea because I believe that people should not to be tricked into thinking that a call is from someone when it is actually from another person. I can see that debt collectors and foreclosure agents trying to get to consumers by using this means. Not to say that foreclosure agents and debt collectors don’t have a legitimate reason to call. Another big use of Caller ID spoofing is for pretexting, which is used to fraudulently obtain personal records of someone else. Pretexting has been a big issue lately.

The easiest way to spoof Caller ID is to Voice over IP (VoIP) or T1 PRI lines. Anyone can get a VoIP service, but T1 PRI lines are expensive because it has 23 phone lines and usually is for businesses.

There are several companies that offer Caller ID spoofing. Most of them work like a calling card, where the user dials a toll free number, and enters the pin number, desired Caller ID, and the number to call. Prices start at $10 for 60 minutes of talk time to U.S. and Canada numbers.

When the law passes, these companies will have to change their business model or go bust.

Some of the companies are: Telespoof, SpoofCard, and PhoneGangster (wow, nice name!)

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Concerns about Ooma

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I haven’t tried Ooma yet, but it sure feels like the greatest thing since sliced bread, given all the hype and buzz surrounding it. And it’s just started private beta. You can find some of the greatest reviews at GigaOm, Crunch, Engadget, Mossberg, – some of the writing are pretty clear indications that Ooma reached out to these folks to publicize the private beta launch. So I thought I’d do a quick analysis to see if there are any drawbacks.

In any case, here are some of my concerns:

  • Ooma routes calls via another Ooma box’s POTS telephone connection to terminate calls. This also means that you could hook up a recording device or an IP-PBX like Asterisk between Ooma and your phone jack on the wall and record conversations. You might not know the people in the conversation, but the receiver of the call is in your area code. The called number should be trackable, and then you could easily get the name and address associated with that number online.
  • If some else’s call is terminated through the telephone connection hooked to your Ooma box, the caller ID seen by the called party would be your number, even though you wouldn’t even know that a call is routed through your Ooma box.
  • If some else’s call is terminated through the telephone connection hooked to your Ooma box, your local calls (for many people most calls are local) will be routed via the Internet and then via someone else’s Ooma box. Despite having local phone service, you will now get lower quality service. Might as well not get rid of local service and get vonage.
  • If you are making a call that goes through someone’s Ooma box and that person dials 911, then your call will be automatically and immediately get disconnected. This has low probability of happening, but a valid concern nonetheless.

Ooma is still in private beta. By the time Ooma goes “public beta”, hopefully these concerns will have been alleviated!

Yahoo! 411 service

y3.gif Google has it’s 411 Service. Microsoft recently bought Tellme, a speech-based Internet services provider to power Local Search. For those of us who’ve known Yahoo!, Google, and Microsoft as the triumvirate of search, Yahoo is notably missing from the 411 camp.

411 is just another way to search for information, albeit an important one for people on the go, who have no good way to search the Internet. In fact, 411 is so important for mobile customers that wireless service providers have made it a fat-wallet business, charging $1.49 – $1.79 per call. The U.S. 411 market is worth $8 billion, and this is exactly why Jingle Networks (1-800-Free-411) and others have entered this space to disrupt the wireless carriers stranglehold by offering free calls for a 15 second advertisement.

With such a huge market, there’s no reason why Yahoo would stand idle and watch while Google, Microsoft, and others carve their riches in the market. Yahoo has several options: Build, Make or Partner.

The ‘build’ option doesn’t make sense because, even if it is cheaper to build, it will take a long time to develop the platform and fine tune the speech engine to handle different kinds of accents and background noises. I don’t think anyone who wants a 411 service should wait long.

What about a ‘Joint Venture’? Sometimes, a larger company will JV with a startup to complement each other’s strengths – the startups’ innovative product and the larger company’s sales channel and customer base. However, in this case, all Yahoo would do is help the partner become bigger and better, and make it more expensive for Yahoo! to get in the game one day or shut-off Yahoo! entirely from the market.

The ‘acquire’ option makes sense for the following reasons:

  1. Immediate access to the 411 market. Initially, 411 will not be integrated with Yahoo’s systems, but this will happen over time.
  2. Access to an existing base of customers. Some of these will be repeat users, others will be those coming to the service due to publicity.
  3. Reduce competition – buying out an existing provider always reduces the competition.
  4. Improved Speech recognition – it takes time to build a large Search Index/Grammar and fine tune speech recognition. Here is a great article on why Google is offering the service free.

One way or the other, getting in the 411 market will allow Yahoo to:

  1. Leverage Yahoo! Local & Yahoo! Local Maps, and Yahoo! Messenger IM & Voice service.
  2. Leverage its Ad base, especially geography and category relevant ads
  3. Leverage profile information from Yahoo properties to enhance the user experience.
  4. Take 411 to the next level. For example, send address and telephone number via SMS, send directions and MAPs to mobile phone, connect via phone with store or person, use SMS ads rather than just voice ads (voice ads are intrusive).

So who could Yahoo acquire? This is where Jingle Networks’ 1-800-Free-411 comes into play. Jingle also has an easy-to-remember toll-free number.

Expect Yahoo to go 411 soon, and I’ll bet that its with the acquisition of Jingles Free-411 service!

What could GrandCentral do for Google?

News is flying around the blogosphere and tech news sites, after TechCrunch broke the news that Google is in talks to acquire or has already acquired GrandCentral, the “one number for life for all your phones” telephony company.

The basic idea around GrandCentral is to give everyone one single number so that your business and personal associates don’t have to know all your numbers. Calls to the single number can be routed to a variety of phones, depending on rules set by the user. These rules can be set depending upon your relationship to the caller and the time of day. This concept is also called ‘one-number reachability”.

There are several strategic areas where GrandCentral fits within Google’s strategy.

  1. Connect to the Telephone Network: Google Talk doesn’t have connectivity to telephone numbers. In other words, Google Talk is a PC-to-PC calling application that only works with GTalk clients and other XMPP-based VoIP services. Enter GrandCentral, and voila! Google can terminate calls to telephone numbers.
  2. Collect User Information: Google knows your email address from Gmail or iGoogle, search habits from Web History, locations of interest from Google Maps, your locations from weather information… You get the picture – Google knows a lot about you. But Google doesn’t have a key ingredient to creating a full and complete profile about you; your phone numbers and who calls you. Incidentally, this is also one of the most private of all public information that people have. For example, I will almost-freely give away my email address (see my LinkedIn profile) but will almost never give my phone numbers unless I know the person well. With GrandCentral, Google has the opportunity to get all your numbers! Why does Google need this? so that one day Google can precisely target ads to you and customize search results not just to the context, but to your profile as well.
  3. Store voicemails and recorded calls forever: Getting a voicemail in your email inbox is easy stuff these days. GrandCentral allows you to record calls too. With GrandCentral, Google can store voicemail and recorded calls forever. Google may be able to transcribe these audio recordings and use it to serve customized ads and to enhance what Google knows about you.
  4. Call from a Web page: Google already has the store front, purchasing, payment, checkout available. All it needs is a way for customers to embed a call button on a web page and Google can take the fight to Skype and eBay.

PS. Although TechCrunch says “We are trying to nail down the acquisition price.”, the title of the post implies that Google is paying $50 million for GrandCentral. See http://www.techcrunch.com/2007/06/24/google-to-acquire-grand-central-for-50-million/.

DIRECTV and EchoStar join Clearwire for some Triple-Play

DIRECTV and EchoStar, two Satellite TV providers, are about to boost their firepower in their fight against the cable companies, who have been giving the Satellite TV providers a good beating with attractively-priced triple-play package of video, phone and high speed Internet .

Today, Clearwire, an upstart WiMAX provider, made a cross-selling marketing agreement iwth DIRECTV and EchoStar (owners of DISH Network). The pact enable the satellite companies to offer Clearwire’s WiMAX high-speed Internet service to their customers and Clearwire will be able to sell Satellite based video to its customers. Each of the three companies will have a triple-play (Broadband Internet, video and voice) solution to market in all current and future Clearwire markets. The launch is planned for later this year.

This is not expected to create big waves in cable land because, Clearwire, the company founded by wireless entrepreneur Craig McCaw, only has 258,000 customers as of March 2007. Clearwire’s service covers 9.9 million people in 420 cities across 39 markets in 13 U.S. states.

This is a desperate attempt for DIRECTV and EchoStar, who have been getting a good beating from cable companies offering attractively-priced package of video, phone and high speed Internet (triple-play).

On the other hand, this deal could give a huge boost to WiMAX’s (and Clearwires) fortunes in the US

What would happen when cable companies start offering quad-play (voice, video, data, and wireless)?

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Skype’s Wireless Strategy – Complaining

Skype is well known for its innovative technology and low cost strategy that has propelled it to be a VoIP darling. And I am a big fan of Skype. However, Skype has had difficulty in cracking the wireless (cellular) industry, so Skype has adopted a unique strategy – Complaining.

Skype petitioned the FCC (the Federal Communications Commission that governs telecommunications in the US) in February seeking a ruling that the Carterfone principle applies to wireless networks and asks the FCC to create an FCC-guided, industry-led forum “to ensure the openness of wireless networks.” (a form of Network neutrality). In other words, Skype wants the FCC to apply the famous 1968 Carterfone decision that allowed consumers to hook any device up to the phone network, so long as it did not harm the network, to the wireless network as well.

Skype’s interest in this matter is crystal clear – it wants wireless carriers to allow any software or application (including Skype, of course) to make calls over their network. Some Wireless carriers explicitly prohibit users from using certain applications such as Skype in their customer agreements (does anyone ever read them!), but not all do. Others have circumvented this potential problem by keeping their devices closed – by preventing, if not making it utterly impossible, to install applications on a wireless device.

There is a certain important caveat associated with the Carterfone case that such an action should be “privately beneficial without being publicly detrimental.” Now, I can bet you that wireless carriers such as AT&T, Verizon Wireless, Sprint Nextel, and T-Mobile will fight this tooth and nail claiming that opening up the wireless network to any application could be very harmful to the overall network. Imagine some kind of virus application, or malware being installed on the network, which starts pinging all the other mobiles in the wireless network. This could easily bring down a wireless network and even prevent emergency calls from getting through.

Skype recognizes that its proposal would pose some thorny technical issues. That’s why Skype is suggesting the creation of an FCC-guided forum to handle technical specifications, one that would operate transparently and would involve all stakeholders in the issue. Skype’s view is that such a forum would ensure that “no entity can enforce techniques such as blocking, locking, or certification requirements that have the intention of preventing consumers from modifying or installing software unless it is reasonably proven that such software harms the network.”

I say good luck to that. Why should be FCC get involved in handling technical specifications for wireless carriers and vendors? FCC doesn’t do that for other industries, so why should FCC get involved here.

Part of the problem is the belief that there isn’t much competition, but there is healthy competition, as indicated by the steady decline of voice ARPU. In its filing, Skype argues that the arrival of 3G services could offer “tremendous new sources of price competition provided by entities such as Skype.”. It’s difficult to argue that the wireless industry lacks competition when numerous wireless carriers, including Amp’d mobile (see related article Amp’d Mobile in Bankruptcy), have entered the market in the last 5 years. Plus, if competition is a real issue, the FCC could grant more wireless licenses so that more wireless carriers can operate in any given area (not an easy thing).

Interestingly, in January 2007, Skype was complaining that high carrier data charges was preventing the use of Skype on wireless.

So far Skype has had little luck with this strategy. So Skype’s newest complaint is that mobile phones are ‘locked’. Skype also complained that “Carriers are using their considerable influence over handset design and usage to maintain control over and limit subscribers’ right to run software communications applications of their choosing.”

While most phones are in the ‘locked’ category, Skype doesn’t point out that not all phones are locked. Advanced Devices such as Smartphones, PDAs, and Blackberry devices that comprise a small but growing share of mobile phones are ‘open’. Interestingly, Skype doesn’t seem to have made much ground in this category. Of course, Skype will say that cellular contracts prohibit customers from using VoIP applications. First of all, I think only T-Mobile does this. Second, Skype is a Peer to Peer technology that assigns TCP/UDP ports dynamically and hence cannot be isolated and blocked successful. However, the difference is that Skype software is rather network intensive, so naturally wireless carriers are wary of Skype.

Interestingly, even Skype doesn’t allow any device to connect to the Skype telephony network. Tom Keating talks about an example here.

There are several reasons why Skype is not ready for cellular today. In a future article, I’ll articulate those reasons.

Cheaper International calls with Skype To Go

Skype today announced a new feature called “Skype To Go” for Skype Pro customers. For those already spending a small fortune on International calls, this allows you to make international calls at local rates by dialing a local number. Now, you just have to pay the The SkypeOut rate of the country you are calling (plus local phone charges, if any)

Frankly this is not much different than using a local calling card to call internationally. For example, I use WQN to call from the USA to Sri Lanka (ah yes, that beautiful country otherwise known as Serendib). WQN has both toll free (800) or local number in the US (toll free numbers charge a little more). I can dial the local number from my mobile phone (at no additional cost as long as I’m within my minutes), and then dial the international number.

I’ve even programmed the International numbers I call into short codes (e.g. #1, #2, #3). All I have to do is program the WQN number and then the International short code, along with a ‘wait’ in between in my cell phone’s addressbook and I don’t even have to enter any numbers. No need for PINs, and I can even recharge by calling the same toll free number.

How it works

* You get a local number – it’s your personal To Go number.
* You assign the To Go number to an overseas number.
* Save the To Go number to your mobile.
* When on the move use To Go to save on international calls.

So what’s the big dilio about Skype To Go?

Other Coverage
1. Skype To Go: international calls from your mobile at local rates