Wifi Revolution

If there’s any doubt left that investors are confident in the promise the mobile VoIP holds for the telecommunications industry - there shouldn’t be anymore: London-based mobile VoIP provider Truphone announced recently that it has secured $24.5 million in venture capital from several prominent investment groups – the largest round of Series A funding in the European tech sector for 2006.

The mobile VoIP start-up, whose software is currently in beta, says it will use the funding “to execute its vision of fundamentally changing the economics of mobile communications and providing revolutionary new services to mobiles,” increase the selection of handsets it supports, and launch its mobile VoIP service in markets “across the globe.”

The funding round was led by Wellington Partners, a leading pan-European VC, along with global media groups Independent News & Media and Burda Digital Ventures. They join existing investors Eden Ventures and business angels.

Truphone claims the rollout of its new service “will create a worldwide Mobile Internet Network Operator providing a critical mass of customers with a free/low-cost alternative to conventional cellular network service providers.”

“We led this round of investment because we have followed the rapid rise of VoIP on the fixed-line network and believe that VoIP will now move to mobile devices,” said Joerg Ueberla of Wellington in a press release. “Other players offering free/low-cost VoIP-based telephone calls require the use of a PC or a fixed-line phone. Truphone is the only player that offers truly free mobile-to-mobile calls across the world – a veritable disruption. This value proposition has been proven by thousands of users who are spread around the globe and were acquired by word of mouth within weeks of the launch of the beta version.”

“Truphone is a Mobile Internet Network Operator – we are radically changing the economics of the market and providing wholly new internet-enabled services to customers’ handsets” said Truphone CEO James Tagg. “By securing this investment, we have passed a significant milestone in realizing our vision.”

Truphone announced the launch of the beta of its WiFi Telephony service in selected markets in September. It is one of many companies now working to deliver WiFi (News - Alert) Telephony (or VoWLAN) to consumers and businesses.

WiFi Telephony is just one form of mobile VoIP, and should not be confused with other wireless network technologies such as EVDO rev A (which is synchronously high speed - both high speed up and down), HSDPA and WiMAX.

Truphone’s service currently works on Nokia’s (News - Alert) E-series and N-series handsets. The company also plans to support additional WiFi-enabled phones, including those built on the Windows Mobile platform.

VoIP calls between Truphone handsets are free worldwide, while calls to landlines and other mobile phones will be charged at characteristically low VoIP rates. For a limited time, users in the US will get free calls here and in Canada. Meanwhile, UK users will be able to call some two billion landlines in major countries for free.

Truphone’s software integrates seamlessly with a WiFi phone’s existing address book. Once set up to use a WiFi hotspot, the handset connects automatically next time the phone is in range. This “seamless handover” between networks is a critical feature because users do not want to be burdened with having to manually switch the phone over when entering a “hot spot.”

The company plans to add new features to the service over time, including support for Truphone SMS messaging, presence functionality, and, further out, geo-location and community-building.

The SIP-based mobile VoIP platform employs several leading-edge techniques, including the self-healing, small-footprint AMR codec to ensure optimal call quality even under less than optimal conditions. Plus, unlike other WiFi applications, it uses smart, low-level coding to minimize power consumption.

Another player in the WiFi space which recently launched its own brand of WiFi Telephony is UK-based aql. The VoIP service and mobile messaging provider has also released software enabling Nokia E (News - Alert)-series users to make free peer-to-peer WiFi calls over its mobile VoIP network. Following the release of its beta, it, too is ramping up to deliver mobile VoIP to other handsets. It is entirely possible that these two companies will end up becoming fierce competitors in the now-ripening WiFi Telephony arena.

Although it holds the promise of extremely inexpensive mobile calls for consumers, WiFi Telephony still faces many hurdles, not the least of which is finding the needed real estate to install base stations and antennae in order to establish a large coverage area. This is going to be particularly challenging in urban and suburban areas, where GSM network equipment has already eaten up a lot of the prime space. Besides its inherent range limitations, the cost of the equipment, power consumption and the effect of mobile VoIP calling on the Internet are all concerns which will need to be addressed.

For more information, visit www.truphone.com.

What’s the number one VoIP conference in terms of attendance? What’s the leading VoIP expo for exhibitors in terms of lead generation? And which VoIP industry event will feature special attractions for service providers, resellers, and the enterprise and SMB market, as well as an overview on the future of IP Telephony? Answer: INTERNET TELEPHONY Conference & EXPO EAST, January 23–26, 2007. See you in sunny Ft. Lauderdale!

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Patrick Barnard is Assignment Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit Patrick Barnard’s columnist page.

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