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Tuesday, 19 January 2010

Jajah + Telefonica

Posted on 01:02 by Unknown
  • Most 3GPP / UMTS operators will need to wait until at least 2011-12 before starting broad migration of circuit telephony to standardised VoIP. In the interim they will have to compete or partner with pre-standard VoIP players.
  • Operators expecting to deploy LTE networks need to consider gaining prior experience of mobile VoIP. Simultaneously rolling out a new radio technology and a new voice architecture is a huge risk.
  • There is scope for partnership between VoIPo3G innovators and incumbent operators (and other parties), especially on HSPA networks. Initial reticence will be countered by awareness of the threats of outright competition.

Those three bullet points came from the first-page summary of a report on VoIPo3G that Disruptive Analysis published in November 2007.

There has been considerable discussion on the web and various private forums about exactly why Telefonica (specifically its European arm, O2) acquired VoIP provider Jajah for $207m, a couple of weeks ago while I was on holiday. GigaOM has a good article on it here, and I've seen a few others as well.

The most obvious parallel I see is with BT's acquisition of Ribbit. In that case, BT wanted an entry-point to the developer community, and especially enterprise CEBP (communications-enabled business process) marketplace. This area is epitomised by companies like Salesforce.com, as well as a plethora of other firms helping firms manage customer and employee interactions via voice - essentially an evolution of CRM.

Telefonica/02, however, appears to be more focused on the consumer space, especially the possibility of hooking up its existing telephony user base (mostly mobile in Europe, but not exclusively) to web-based and apps-based social networks or other online applications. Jajah provides the voice back-end for Yahoo's IM-integrated VoIP service, and more generally has a presence in mashups and "white labelled" voice for various Internet players.

I can see various synergies here - some immediate, some longer term. But the bottom line has to be that O2 wants to learn more about voice without the "heavy lifting". The value of much of the new telephony concept isn't about "big iron" like IMS or even QoS. It's certainly not about vague 1980s-style waffle about operator-centralised "multimedia", as per the defunct MMtel standard. It's about the social value inherent in having voice as a platform or a web component.

Jajah helps Telefonica start to break away from the stifling "it will all be IMS some day" mantra, or at least leave it to the traditionalists slaving away in the infrastructure dungeon, trying to rescucitate the 3GPP zombie's corpse. That's not to say I expect O2 to just abandon that approach over-night (it's too ingrained into the telco DNA), but taking a first step is a wise move - it allows the company to see what else is out there.

More pragmatically, it also helps with a number of other opportunities:

- Early deployment VoIPo3G, perhaps starting with laptops connected via mobile broadband, or selected smartphones. This will probably run as a "second line" on phones, in addition to traditional circuit - a bit like having Skype or Truphone (or Jajah) on a device today, but controlled by the operator. I've been expecting operator VoIP to appear for some time in this guise.
- An easy off-the-shelf way of testing and playing around with VoIP on LTE for upcoming trials. If Jajah works sufficiently well on best-efforts or "groomed" data connections, it could save Telefonica a large amount of cash paying for unnecessary QoS over-engineering in future.
- Various options for Spanish language communities such as travellers and ex-pats moving between Latin America and Spain
- A way for Telefonica to move into new markets outside its current geographic footprint. In particular, this means that it's yet another operator doing the "unmentionable" and owning web-based services accessible from other operators' devices and access subscriptions. Along with Voda 360 and Orange ON, Jajah is now another example of under-the-floor providers playing over-the-top
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