Saturday, December 06, 2008

Truephone -- mobile Skype (almost)

We have seen that cellular network operators control applications and devices in order to preserve their business model, which centers on selling service like SMS messages and phone call minutes rather than unfettered Internet access.

But, newer phones with both Wi-Fi and cellular radios can run VoIP software when using their Wi-Fi connections to the Internet.

Consider, for example, Truephone.com. Truephone software runs over Wi-Fi connections on the Apple iPhone, iPod Touch and other phones. As with Skype, calls to other Truephone users are free, but they charge for calls to landline and mobile phones. Truephone's rates are much higher than Skype's. For example, the per minute rate from the US to a Chilean mobile phone is $.70 on a Truephone while Skype is only $.243. The difference for landlines calls is much greater -- $.68 versus $.024.

Regardless of their rates, Truephone illustrates two points we have discussed: innovation occurs rapidly on "dumb" end-to-end networks and the Internet is a highly leveraged platform on which to develop businesses.

Truephone CEO Geraldine Wilson recognizes these points in the following quotes from a BBC article:

"There are a slew of new features we're rolling out for the iPod Touch that will let users call landlines, Skype users or send instant messages. We're talking weeks, not months, before these go live."

and

"We've decided to focus on devices that are wi-fi enabled and have an apps-store. For the consumer, there has to be an easy way of downloading an application."

They are innovating rapidly and will "outsource" distribution and sales to the Apple and Google Android stores.

Do you currently use your cell phone as an Internet access device? Would the ability to make Truephone calls convince you to do so?