Truphone rides mobile trends

If there's one “new service provider” perhaps most poised to upset the mobile status quo, it's London-based Truphone. So poised, in fact, that last summer T-Mobile blocked mobile voice-over-IP calls made by its customers before being forced by a court to put them through.

Truphone's proposition is simple: Customers can use their mobile data connections — Wi-Fi is good because it's often free; 3G is fine if it's flat-rate and not metered — to place VoIP calls. Today, Truphone offers downloadable software for several Nokia series phones to enable mobile VoIP calling.

That may sound like the promises made by many other software-based mobile VoIP solutions, but Truphone has a couple of secrets — not to mention savvy and growing technical and business teams — to make its alternative mobile approach a reality, said James Body, research director for Truphone.

First, Truphone runs its own back-end routing technology to place calls on the best path possible while negotiating low termination rates with landline providers. Truphone also puts a major focus on building best-of-class voice software for the devices it targets. For instance, while a number of companies claim they are ready to deliver mobile VoIP for Apple's iPhone, Truphone claims a lead in hacking up the iPhone hardware to handle tricky tasks such as quirky phone power-off functions, audio level settings and more.

And like an alternative provider, Truphone doesn't just plan to deliver a version of its mobile VoIP client using the sanctioned iPhone software development kit; it is looking to make an open-source version of the software available for “jail-broken” — or independently unlocked — iPhones as well, Body said.

Truphone also is innovating on the distribution side. It is working hard to build a dual-mode phone bundled with its software that it can sell in stores. A recently closed funding round will be used for that effort, Body said. “We have some bold things planned,” he said.

But most significantly, Body believes that the proliferation of options for radio access to mobile data services — most customers use Wi-Fi today, but emerging WiMAX and flat-rate 3G/4G services will be options soon — represents a change in economics over today's mobile virtual network operator plays in which “margins are razor-thin,” he said.

“We don't have spectrum, but we do have IP infrastructure,” Body said. “Mobile prices are going to drop, and ultimately for carriers, voice and data and [short message service] revenues are going to be less important. The main revenues are going to come from value-added services.”