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VoIP or VOD – Which Is the Killer Application?
by Ken Pyle, Viodi, LLC
January 5th, 2004 Issue
As a result of an opinion piece by a California PUC member that I referenced a few months ago in the Viodi View, I was asked to review a new IP telephone and its associated service. The company that manufactures the phone and provides the service is called AICO Systems. The service is branded under the name of TalkPro. It is a service that has quietly amassed 630,000 subscribers, mostly in Asia. It has now been launched in the United States.
At first glance, the TalkPro service would appear to be similar to Vonage’s service. It is a VoIP service that provides the consumer with their own phone number and accepts incoming and outgoing calls to regular, cellular and other TalkPro phones. The TalkPro R-100, broadband phone, connects directly to a LAN, so a computer is not required for operation. The TalkPro U-100, USB phone, is also available, allowing one to use their computer as their network connection (e.g. say for wireless 802.11 applications, while traveling).
The AICO Systems people emphasized that this was not a replacement for a primary line with the E-911 service it provides and probably never will be. They don’t support Local Number Portability. The phone number scheme is somewhat cumbersome, as to call someone with a TalkPro phone, one must first dial a local number available for major U.S. cities and then the seven digit TalkPro number. The advantage of this format is that people without a TalkPro phone can call a TalkPro user anywhere in the world for the cost of a local call.
From my limited use, the service seems to work well. It has a number of features, such as voicemail and call forwarding, which I have not tried. The call forwarding feature allows calls to be forwarded to another number (or voicemail) whenever the TalkPro is offline, so you don’t miss any calls. The phones are not SIP (Session Internet Protocol) compliant today, but the plan is to have them SIP compliant by mid-2004.
The testing I performed was not comprehensive, but I was able to receive incoming calls and place outgoing calls, all while surfing the Internet. The quality was quite good – much better than cellular.
The service seems to be targeted to those who travel, have a need for a low-cost second line, do a great deal of international calling and/or cannot afford a standard telephone line. Other than the cost of the phone, which ranges from $80 to $170, there are no monthly service charges. Like other VoIP services, calling is free to other phones on the TalkPro network. Terminating to regular phones costs as little as 3.9 cents per minute.
AICO Systems objective seems to be setting up retailers, such that the retailer markets the TalkPro service while AICO handles the operations portions of the service. They can then focus on providing better service, while the retailers focus on marketing to their specific niches.
For instance, in Africa, there are people who are setting up “calling centers”, which are basically an Internet Café set up with TalkPro phones, where people can make international phone calls for a fraction of what they would normally pay. In the U.S., one distributor seems to focus on providing the services to traveling business executives. Corporate and commercial applications, such as the hospitality market, are also on their radar screen.
From a cost standpoint, they seem to be very competitive with similar providers. Their phones are currently $10 to $30 cheaper than comparable phones from other vendors and the cost of calling appeared to be a bit cheaper in high cost calling areas. For instance, the cost to call the Netherland Antilles (which I did) was $0.24 per minute versus $0.35 per minute for Net2Phone. If I had colleagues with whom I made regular international phone calls, a pair of these phones would quickly become a must-have.
From an independent telco perspective, AICO Systems could enable a whole new class of competitors that use telephony as a loss leader for the other products they are selling. These competitors might not go after the mainstream customers, but, by being strong in particular niches, could begin to put a significant dent in the telcos’ overall subscriber base. The success of this and similar services reinforces the importance of bundling high speed Internet and Video as part of a telco’s strategy of fending off new competitors.
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