TechCrunch reported this morning that Jajah, a provider of online voice services, is likely in the middle of a bidding war to be acquired. The suitors rumored to be Microsoft, Cisco, and O2. The author expressed surprise that O2, a telecom provider, was at the table. Since we work with hundreds of large carriers around the world at Mural and have also integrated Jajah into CloudProfile, it made me want to comment.
It should NOT be a surprise that O2 is at the table.
What should be a surprise to everyone is that we don't see a lot more of this type of behavior and innovation by telecom providers around the world.
Over the past 10 years, traditional land line voice revenues have been completely commoditized as the combination of the Internet, broadband access, and computers have made it possible to have voice calls and more essentially for free over the Internet. The growth of Skype to more than 500 Million users and $700 Million in revenues is perhaps the best example of how powerful this shift is.
One of the last holdouts around voice revenues is the mobile space. Increasing use of mobile phones has kept mobile carriers in the voice space and has even driven a decent amount of revenue for tools like Skype where users purchase "Skype Out" minutes to be able to call regular phone numbers from Skype.
But that game is going to end soon. Pure voice revenues on mobile phones is going to go the same way that land line voice revenues did, and the exact precedent for how it is going to happen is already in place. Combine mobile broadband (3G, LTE, WiMax, WiFi ubiquity) with mobile computers (which is what smartphones like iPhone, Droid, etc. are) with software like Skype on those devices and boom, game over.
The wave is already happening. Google Voice is perhaps the best example of the level of disruption that will occur. Michael Arrington expressed the worst fears carriers this summer when he dropped his iPhone in order to gain access to a phone that would support Google Voice:
"Apple and AT&T are now blocking the iPhone version of the Google Voice app. Why? Because they absolutely don't want people doing exactly what I'm doing - moving their phone number to Google and using the carrier as a dumb pipe."
Some carriers "get it". BT launched BT Tradespace with us and acquired Ribbit ("Silicon Valley's First Telephone Company") just over a year ago. Verizon is preparing for a wave of innovation with the sell off of the land line business and the launch of the Google partnership and the Droid.
But all of them need to go much further if they want to survive and thrive during the next decade. In ten years carriers need to be seen by their customers as 100% about the value of the applications and bits that are delivered, not the pipes themselves.
I'll write more in the near-future about the roadmap of services that we think present the best opportunity for carriers to lift themselves out of becoming pure commodities while delivering incredible value added services to customers. In the meantime, let me know what you think. If you're one of those carriers who is thinking about this, I'd love to connect with you.
Tags:
- Carriers
- Droid
- iPhone
- Verizon
- telecommunications
- Innovation
- Skype
- Android