Tag Archives: TRAI

Skype: Microsoft acquistion and disruptive VoIP?

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New York Times has run a story on Skype‘s acquisition and

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how would it be disruptive for the traditional cellular carriers.

A lot has been written skype’s acquistion (please see the related links below). Some people feel that it’s going to be good for the enterprise market, some feel that it is a useless deal with Microsoft bleeding millions of dollars everyday and a questionable “internet policy”. Perhaps all these rationales look at the whole question piecemeal. But no one has the complete answer.

I have been interested in the VoIP market for long. I have written about it earlier extensively (here, here, here) in the past. Yet, Skype’s acquisition takes the cake.

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In an earlier post, I mentioned:

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TRAI called for implementation of Internet Telephony and Carrier Access Codes.

This was mandated much earlier way back in 2001; however, this was opposed by Bharti. Reliance had entered with the premise of “death of distance” and had made STD calls ridiculously cheap….. If Internet telephony is implemented in it’s present shape, it would

see present rates crashing down to a large extent.

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It would give a new lease of life to ISP’s like Sify and other fringe lunatics to scale up investments. I can foresee the entry of players like Skype as well as other SIP players which rely on open standards. It’s hard not to imagine the real gains to economy as a whole and it would benefit the adoption of setting up of WiFi hotspots on a larger scale.

In another blog post, I had written:

Govind says that Wifi can be used to carry calls which works out to be cheaper. Of course, I have explored these options way back earlier on; the current “competitive” scenario has resulted only in oligopolies and each new talk plan is basically a rehash of the others. Without disclosing upfront about the estimated monthly outgo, TRAI okays each plan without taking the consumer’s advantage in question. As a result we are fleeced to no extent. I really doubt whether WiFi can be used to carry out the calls-the investments are way too huge to justify parallel (and cheaper ) networks. Where would Bharti get it’s crores from?

Assuming that wifi becomes available all around, what is the guarantee that telcos won’t use all means to block the calls via Skype or any other internet phone? High usage charges would spike any consumer interest because in all probability it would be a “value added service” which by it’s own argument, can be priced higher. Unless of course, people set up their own small WiFi networks. A long shot indeed.

And in the winning entry for “Big Ideas Contest”, Skype (or Internet Telephony) was mentioned in passing; actually leveraging the low cost of routing international calls and passing on the advantage to the customers.

Teleconferencing would make it easier for people to people contacts; Gujarat has shown the way! Why can’t India have something similar to Skype? (There is a move to have something similar in the GNU world where encryption would be based on open standards).

I don’t have any love lost for Microsoft; but as any corporation, it does what it has to do to survive. It’s a jungle out there and only the best survive by breaking through the clutter. There can be no easy answers to certain “defining moments”; we must wait for the answers to reveal themselves. The point here is that I have remained consistent in my assertions over the years and have called for opening up the standards instead.

Let’s look at what New York Times article has to say.

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The telecommunications industry is already in a state of flux as more people disconnect their home telephone lines in favor of cellphones. Now the wireless carriers are looking for new ways to make money based on mobile broadband and applications, rather than voice minutes. “Eventually, everything migrates to a data channel,” said Brian Higgins, an executive at Verizon Wireless who is developing products and services for the company’s high-speed 4G network. “We’re moving away from silos of communication to one where everything is combined together.”

This assertion is not valid but rather a corporate spin and gibberish. The reason is that landlines offer higher rate of data transfer and wireless networks can easily get choked. Similarly for 3G networks being pandered about in India; main reason is to offer better voice minutes than spur on the data usage. Had there been any commitment for the same, the market would have reacted in a “bloodbath” to drop the rates and make it better to access the services.

Howsoever clueless these people are, data is definitely not on their minds. Hence, the question of “communication silos” does not arise at all.

But the Skype deal also signifies a larger interest in next-generation communications services. It is not just Skype that the wireless companies need to worry about. A bevy of mobile messaging applications, including WhatsApp, Kik, GroupMe and textPlus, allow people to send messages over data networks, sidestepping the cost of sending and receiving standard text messages.

Carriers already must deal with many new competitors in the communications game. Name companies like Apple, Facebook and Google are making services available that traditionally only carriers could offer. Google, like Skype, offers ways to make free phone and video calls over the Internet. Apple lets iPhone owners make video calls.

The ultimate risk for the carriers, analysts say, is becoming “dumb pipes,” providing only the data connection and not selling any more sophisticated communications services themselves.

Agreed on this count. The newer generation services mentioned here are really disruptive. However, they have not achieved a critical scale; not to the level that carriers start blocking them actively violating “net-neutrality”.

So how would the companies react to such developments? Possibly by lowering expectations of supra-massive profits at our expense and by “signing up deals”. Although Value Added Services (VAS) remains a viable channel, I still have to see any “developments” in that; it remains a subject of a future post.

Carriers have responded to the shift toward digital communication differently. Some seek to leverage the new wave of services to differentiate themselves and gain an edge over competitors. Sprint, for example, recently united with Google to let its customers link their Sprint phone numbers to Google Voice, a service that rings all of a person’s phones and even Gmail when someone calls that person’s number.

However, these efforts are half hearted approaches to the present dispensation. Skype is important, yes, in the VOIP Space. With the development of GNU Public Telephony project on fast track, I am sure something would definitely strike in for alternative access opportunities like SIP phones coming in the mainstream.

I remain positive for a Vonage like service over landlines and I strongly back that company (please, it’s not an endorsement). For a fixed amount, it’s possible to call in major countries and is totally “place agnostic”. I can make unlimited international calls all across for a fixed monthly fees. Thats the real power of broadband for communication. Wireless is not cool because of it’s inherent limitations and POTS (Plain Old Telephone System) is STILL the best bet.

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Facebook and social media: Overblown AND overhyped

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I have argued against excessive reliance on social media; it is a stupid decision to hail Facebook and Twitter as the “next destination”. This is the problem with the marketing executives either from the mobile companies or handset manufacturers. For example, it’s not difficult to miss the blurb that accessing Facebook is “easy” by a “single click button”.

The experience on ground is different. Let’s assume, for a moment that there are over 600 million users. How many of them are active? What is the “engagement matrix” on the web site? What is the actual cost retrieved by

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Facebook from it’s advertisers; i.e. how effective is advertising on the platform? Is social engagement really effective? I mean, it’s stupidity to see links from Facebook friends streaming in Bing (which has implemented the feature and live on to crow that they are up in the pissing game with Google).

If you dissect the issue further, accumulating a number of “likes” on the platform does not mean that it likely to translate into action. I was moved by this interesting blog post and they

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gave explicit reasons why they are moving away from facebook hype: (emphasis mine)

 

1. The Facebook API changes too often. The plug-ins are buggy, the API changes without notice rather often, and there are too many rules constraining how developers can use the API in building applications. As a platform, it is unstable, period. ……

2. Facebook is overhyped. Personally, even though Facebook actually has 600 million active users, developers still tend to overestimate how many people actually 1) have a Facebook account, 2) use it regularly, and 3) are comfortable using it as a third-party authentication method. Many consumers across different niche markets are simply not familiar with how Facebook works; developing Facebook-only applications marginalizes this segment of users, who may be substantial in number.

3. Facebook is still mainly social for most, and exclusively social for some. We are still not completely convinced that Facebook can be an effective platform for any commercial activity…….Of all the new variants of ecommerce, the one that might actually take off is, in our view, mobile commerce.

More interestingly, Facebook and other industry “leaders” are opposing the proposed bill to protect the user’s privacy. I am not sure how this is going to pan out but this is good enough indication that some sense has dawned to protect the users from advertising onslaught.

California could force Facebook and other social-networking sites to change their privacy protection policies under a first-of-its-kind proposal at the state Capitol that is opposed by much of the Internet industry……social-networking sites would have to allow users to establish their privacy settings…

….like who could view their profile and what information would be public to everyone on the Internet – when they register to join the site instead of after they join. Sites would also have to set defaults to private so that users would choose which information is public

These measures would not apply to India or it’s privacy laws though I heard they have been tightened in recent times; the impact on end users has not been discussed.

There’s one more compelling reason to avoid reliance on Facebook; falling traffic. Countries that were on the path to early adoption is seeing a fall in the traffic (perhaps an indication of slow and waning interest).

The average decline over months has yet to become negative, though. There are other possible factors at work, too, such as bugs in the Facebook ad tool that we get this data from…. in order to identif the long-term directions here is crucial for planning how to capitalize on Facebook’s success, or lack thereof.

It is most likely to be argued that India would perhaps be a “fantastic growth opportunity” but is corporate gibberish. Even if the “dark populations” are lighted up, in absence of aggressive promotion of localized content, it is unlikely to see a massive expansion. It seems that most of the companies keep their “outposts” in India to hire cheap labor for “translation” efforts. It’s not a generalized statement, but thats the reality. Again, there is NO reliable data to break up the traffic specific to the sites or universally agreed metrics to track traffic to popular sites (however, Opera Mobile‘s stats are likely to be more reliable).

Where do we go from here? It is important not to rely completely on the “social aspect” of the net. It is a matter of time before it fades away for perhaps a better “personalized approach” (more so as semantic web matures and we have better ontology) to deal with. That also comes as a rider but there is no “perfect ideal approach”. This is something that the next generation access devices and advertising agencies should keep in mind before they can actually deliver better “value added services”.

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Mainstream Media: Unable to grasp digital trends

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This post, was in part motivated by Shyam’s incisive commentary on FirstPost. It is promoted by Network18.

First Post primarily remains an “aggregator” of news; perhaps the underlying motivation is SEO tricks of identifying the trending topics and create topical interest by paying “journalists” to create blogs around it. Unfortunately, it doesn’t work like this. Trying to covert the traffic into “unique visitors”, cross promoting it on other media channels and identifying the “trends” to write on issues smacks of Huffington Post‘s tactics.

I personally believe that much of criticism that stems for Huffington Post comes from the mainstream media; possibly they are unable to comprehend the huge gains that this site has made in a short span of time. The owner has been able to do a web alone business, “aggregate” or scrape content, pay out dimes for it’s star bloggers and more important, get the advertising $$$. Hence, it tends to get the ire of the “purists”.

Indians, of course, wish to replicate a proven model. No one, wants to adapt to a new order or invest serious resources in building up a web property that has a lasting value proposition. Top of the mind recall is Techmeme and is my first

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stop everyday in Google Reader to identify the breaking stories as it happens (it utilizes RSS feeds in the background; you could search for it’s leaderboard OPML file on their site to read the stories). A simple implementation (e.g. Webmeme) would have sufficed and promoted it’s journalists to blog independently of the constraints of “mainstream media”.

How is this really concerned with the ethos of the blog? Well, for starters, social internet is all useless hype. Twitter and Facebook are not here to stay; Orkut was a huge failure and Twitter is growing without a service model. It still doesn’t know about advertising nor is

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there any reasonable model to influence it’s evolutiton. Nevertheless, in this internet access challenged country, this is a huge let down.

Perhaps the people behind the product are blissfully unaware of mobile access dominating the landscape (I doubt whether they have a mobile interface optimized) or of the “niche audience” that would be attracted to something like this. However, a cursory glance at the written articles leaves a lot to be desired.

(Highly recommended write up).

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