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Archive for February, 2007

A Vonage buy-out of Talkster?

Posted by talkster on February 8, 2007

By James Wanless
President and COO of Talkster

I’m not one to gossip, but there is a rumour floating around the Internet that VoIP luminary Vonage may be looking to acquire a company that can add “new, rich” features for their customers, and one such company is Talkster. Is the rumour true? I cannot comment on any discussions Talkster may or may not be having with Vonage, even if we were having them. ;-)

The possibility that Talkster (along with our friends at Iotum) could be a Vonage acquisition target was raised in an article from – “Clock Ticks for Internet Telephony Provider Vonage,” (that also ran in and posted on blogs).  In the days that followed this initial post, there has been a growing buzz in the blogosphere about Vonage seeking to buy Talkster as a fast way to better serve its’ customer base by offering new, innovative, add-on services. The buzzing probably started first with article from Voxilla – “Is Vonage On The Prowl” which was followed by this blog post in VC Ratings.

Needless to say, I have spoken to a number of people about this rumour. While the idea has some merit, we have an easier way for Vonage to offer “new, rich” Talkster-like services to their customers. Vonage could quickly integrate our technology and service components into their network and take mobility for Vonage subscribers to a level far beyond the simple access numbers – something similar to a calling card access number – they have today.

The Talkster service is built on a network that can be used by any 3rd party service provider to create new and innovative services that easily integrate into their existing network infrastructure.

Not to introduce yet another acronym, but we at Talkster think of it as NAAS or "Network as a Service". The underlying instant messaging, voice over instant messaging and SIP infrastructure that supports the Talkster service is wrapped up in Web Services and can be controlled from any 3rd party interface that can communicate via the Internet. The idea of web services is not new. It’s a real enabler which is shared by a number of companies including Amazon which has an entire Web Services program championed by Jeff Barr and an elastic computing initiative which allows their network of computer hardware to be provisioned and controlled through web services. Iotum also believes strongly in the idea that web services are an enabler for creating cross platform, network and service opportunities.

Talkster will be many things, including a provider of Network as a Service (NAAS), for all manner of service providers in the market who can benefit from the many pieces of the Voice 2.0 communications puzzle that we have to offer – – all without the need for them to know anything about communications networks. If you want to know more, please feel free to contact me directly.

And as for Vonage, we’re ready to help. We’re also ready to help Packet8, ConnectMe Mobile and any other VoIP provider looking to enhance their mobility services and make them globally available. I’ll discuss rumours that we’re helping these companies in future blog posts.

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Will Free Calls be strong-armed out of business?

Posted by talkster on February 7, 2007

With the closure of FuturePhone as highlighted in an article on GigaOm this morning, it seems like the end is near for the “free” calling companies. AT&T is going to challenge them, or rather the Local Exchange Carriers enabling them, in court. Inevitably, this will take time, but likely will stop “free calling companies” as the payments are withheld until everyone has their day in court. That’s not to mention the (prohibitive) legal cost of defending against such lawsuites which the LECs and the free calling providers are not prepared to do.

This however is not a new situation. Back in the early 1990s AT&T were themselves enabling a similar type of business model. It was called International Settlement and was a means for AT&T to balance out the payments they paid to telcos (often monopolies) in countries like Italy against fees which Italy paid to them. There was a huge imbalance which meant that AT&T paid out much larger amounts to these foreign telcos on a monthly basis and these same foreign telcos had no incentive to renegotiate the rates which AT&T were pushing down at home.

What AT&T quietly did was to let some service providers have numbers in the US which they would on which they would share revenue. Starting to sound familiar? You would pay the equivalent of $1 in Italy to call the US number to listen to your horoscope, football scores, chat etc. etc. AT&T would get their portion of the revenue and share it with the service provider. Now the traffic from Italy started to flow back to the US in much larger numbers and it meant that AT&T was paying out less to the foreign telcos. Italy was just one example.

This practice happened in scores of countries. In some cases, the foreign telco would actually have to pay money to AT&T instead, in effect forcing them back to the negotiating table to talk about reducing rates. Once that happened, the rates were reduced to a point that the shared revenue model would no longer be attractive to the service providers and this flow of "other traffic" for entertainment would disappear.

It was a VERY smart move by AT&T and ultimately a great business. It drove down international calling costs, provided incentive to bring everyone to the table for bi-lateral rate negotiations and ultimately benefited AT&Ts subscribers. I wonder if the LECs in Iowa and Nevada have a similar plan to use this as a bargaining chip for something else they want? It will be interesting to watch it play out.

As I have said before, someone has to pay for phone calls. It’s not free to provide the service and it seems in this case AT&T was the one to pay.

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SPIF Recap

Posted by talkster on February 3, 2007

Ahhhhh Vancouver. When you arrive from the extreme cold warnings of Toronto, the balmy 8c air (that’s 46f for our friends south of the (Canadian) border) can’t help but make you feel good. We arrived ready for the Service Provider Investment Forum (SPIF) event and our fifteen minutes of fame. The event, organized by WINBC and the Kerton Group, proved to be a very worthwhile event to attend with some very interesting companies taking part.

For Talkster, the main event at this two day forum was the presentation session, held on Friday behind closed doors in front of some 25 SPIF members. Each company was allowed a ten minute presentation plus 5 minutes for question and answer. A further five minutes behind closed doors was allotted where the panel would discuss each company as a group, provide feedback, and share their impressions. We are expecting some feedback this week. With a crowd of diverse Telco focused investors you can never expect to hit the nail on the head for all of them, but we do hope that our brief presentation will peak the interest of some, opening the door to more in depth follow-up. That’s the task this week.

Thursday afternoon and evening was for networking. The WINBC group had their regular meeting which included a panel discussion of SPIF members. The discussion was lively and the topics covered were audience driven. A very interesting format I thought, giving the audience members a way to drive a lively discussion around topics of most interest to the crowd and getting the opinions of panel members (who could not benefit from a rehearsal or notes). The panel was followed by a keynote speaker, Jason Cohenour, president and CEO of Sierra Wireless. His speech was a real insight into Sierra Wireless but also for those of us now facing some of the same challenges that Sierra and Jason have faced along the way; a real lesson in some of the basics. "Knowing who’s the boss" (your customers and distribution channels) featured strongly as did "keeping your eye on the ball and not losing sight of your core business". Basic business requirements you may think, but when applied to the timeline of a company in the wireless space where these rules do not always flow, it gained another level of clarity. Thanks for the reminder, Jason!

We also got to meet some interesting companies like Redwood Technologies and Bight Games who were fellow presenters who also traveled to BC for SPIF, as well as also local area companies attending the event. What came up time and time again was the affirmation that Talkster’s network creates an excellent opportunity for 3rd parties that want to add elements of telephony and other person to person communications to their network. Talkster’s network, built on open standards and accessible through web services makes it easy for these companies to use our network for their application communications without having to know anything about signalling, call control and routing. Connections to PSTN, SIP and Voice Instant Messaging networks becomes possible for web programmers and application developers. We will be expanding these opportunities during 2007 and look forward to making some announcements centred around this part of our business.

Another special activity that happened because of our attendance at SPIF was the opportunity to get to know Bill Tam, Colin Quon and Jeff LaPorte, the founders of Eqo Communications. They invited us down for a tour their offices (nicknamed “Eqo Chamber” by my colleague) then to a pub nearby to talk about the industry. These are some of the nicest guys I’ve met who work in Telecom.

Thanks to WINBC and the Kerton Group for putting together a high calibre event. We look forward to more of the same.

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