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August 22, 2006

The reason for my trip to Stockholm: Rebtel

Friends of mine introduced me to Rebtel a couple of weeks ago and after hearing about who they were and what they were up to, I decided to fly to Stockholm and spend the day with them and get to know the company from the inside out.

Rebtel is one of the most exciting startups that I have met in 2006 and they have the potential to become bigger than Skype. While on the surface they may appear to be a “mobile arbitrage play”, there is a lot more going on under the hood that meets the eye. The team of people at Rebtel are both revolutionaries and visionaries and they fully understand the value of “voice as an application” and underlying power of SIP.

From their perspective, “Communication is not between desks and desktops. It’s between people. And peoples’ preferred way to communicate is their mobile phone – their connectivity to the world.”

When I asked their CEO Hjalmar Winblah to describe the immediate opportunity that they going after he said: “The world’s mobile operators are going quickly to big bucket plans because they have to compete. If we do this, mobile operators say, we can defend our ARPU and achieve fixed to mobile convergence – get people to abandon their fixed line phones – and move out the long tail. It’s a defend-and-extend strategy – and that’s what Rebtel is going to leverage with our services that go directly after their remaining margins: international calls and later roaming.”

While Skype is all about peer-to-peer, Skype generally requires the use of a computer, broadband over WiFi or Ethernet, and an operating system that allows you to run third party software. Skype, with its amazing success on PCs, had intentions to go mobile. But it is the wrong technology for it; and the wrong business model. Since the launch of Skype, their success is legendary in the world of IP Communications and Skype showed the world that they can execute and as a reward they were acquired by eBay. In contrast, Rebtel is a different play and a much different bet. Rebtel’s current go-to-market strategy is to leverage what’s out there today: 2 billion standard mobile phones that consumers know how to use. No special downloads required. The catch? leverage “bucket pricing plans“ by getting consumer to place local phone calls in order to speak with friends and family members across national boarders. While “distance is dead” in the world of the Internet, Rebtel has removed distance from the consumers of mobile phones.

Skype leveraged the PC and broadband. Similarly, Rebtel is leveraging mobile phones and operators’ local minute bucket plans. And they’ve built a 100 percent SIP infrastructure prepared for the future evolution of mobile/wireless communications.

The team at Rebtel is trying to build something that lasts; something that drives fundament change. Just like their wireline cousins, mobile operators are best positioned to be wireless access providers. Wireless operators should not be able to claim ownership of someone or their devices. They should be happy just being access providers.

However, these days most mobile operators look at themselves as more than access providers and look to milk their customers for as much money as possible every day. It could be said that some mobile operators believe they have the right to maximize their customer relationships and nickel and dime people..because they can. While mobile operators have benefited greatly during the past six years due to “wireless conversion” they have failed in everything but one thing: getting people to pay too much to talk to their friends.

Look for Rebtel to be a major change agent here. Rebtel is in the business of liberating people from their forced relationship with their carriers. Let the revolution begin!

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(c) 2006 Jeff Pulver. All Rights Reserved.
(This blog posting is copyright protected by Jeff Pulver. Portions of this blog posting may be quoted or abstracted if attributed.)

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Posted by jeff on August 22, 2006 12:31 PM | Permalink

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Comments

My favorite point made by Jeff in this posting: "leverage "bucket pricing plans" by getting consumer to place local phone calls in order to speak with friends and family members across national boarders. While "distance is dead" in the world of the Internet, Rebtel has removed distance from the consumers of mobile phones."

Rebtel is literally empowering its customers to get phone calls from the people they really want to talk to ... no matter where those people are in the world. Doing a much better job at offering "No holds barred" than competitors. Nice benefit for Rebtel is the better defense of its ARPU as a result.

Posted by: Suzanne Bowen at October 23, 2006 09:43 AM

Well it works and I don't agree with the ones that say it is not exciting!Maybe they are mouthpieces for big wireless carriers.Nevertheless,I am cancelling my long distance plan and saving alot :) bye Cingular LD.

Posted by: miner at October 13, 2006 06:20 PM

Does it work? No! Voice quality and usability sucks and it requires 3-4 attempts to get it working...

Posted by: Mike at September 8, 2006 05:42 PM

"anyone with an asterisk server?"
are you kidding me? yes it can be done.. but we are living in a world where there are people out there like my parents that dont even use SMS/MMS.. and struggle with a wireless router and modem.. so I think this is exciting..its a simple app for anyone to use..I recently installed mino wireless on my phone and can tell you that my dad and most of my peers would not go through the trouble..

Posted by: Sam Gonzales at August 31, 2006 11:30 PM

Yes, and I bet Hjalmar and his team's up for something big! Still, there are several apps mobiles can carry to improve our everyday life.

Exciting times, indeed!

Johan

Posted by: Johan Lange at August 29, 2006 05:08 AM

Yes, there is more here than meets the eye...sometimes you need to read between the lines. :)

Posted by: Jeff Pulver at August 25, 2006 12:42 AM

I am usually infected with your excitement of new trends and products, but what is exciting here?
Corporations have been doing this for awhile.
It is a cute app and a nice marketing angle, but anyone with an Asterisk server can do it - so I don't see the excitement, though maybe I am missing something :-(

Posted by: Moshe Maeir at August 24, 2006 04:43 PM