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Telco 2.0 ‘Disruptors’

One of the things people valued at the Telco 2.0 Brainstorm in October was the demos/short presentations by a number of ‘disruptors’ we’d gathered at the event. There’ll be a new group at the follow up March event (watch this space for announcements).

In the meantime, this week on the blog, we’ll share a few of our favourite disruptors. For each we describe: What is it? How does it work? What User Problem does it address? Why it’s disruptive? What are the opportunities for incumbent Operators?

Today we start with PhoneGnome from TelEvolution, started by David Beckemeyer, the ex-CTO of Earthlink.

What is it?
A small box that sits between the POTS line and regular telephone, but also has a broadband connection. It enables users to get the best of both the PSTN (powered line, emergency service, compatible with all alarms and set-top-boxes) and VoIP - without changing number, getting locked into a long-term plan, or buying new handsets.

PhoneGnome is to fixed lines what WiFi handsets are to mobile.

How does it work?
The box automatically self-configures when plugged in, associating the user’s phone number with their IP address in a directory hosted by TelEvolution. The dialtone is entirely synthetic and generated by the device: it effectively takes over the experience and substitutes any new telephony experience you care to invent. Users dial as normal, and inbound calls work as before. Outbound calls can be routed over the Internet if to another PhoneGnome device, or the user has selected an ITSP’s long distance or international calling plan. Inbound calls can have their handling modified, such as call forwarding. Furthermore, the device can add new features (e.g. voicemail-to-email) without the host carrier needing to be involved. See demo.

Problem it addresses?
The primary function of the device to a user is as a means of reducing call and feature costs. However, for a carrier it offers out-of-territory competition opportunities. For example, a wireless operator can build an FMC product and avoid paying termination fees to any host network by using the Internet as a bypass.

Why it’s disruptive?
It enables “unbundling at the edge”, without regulatory approval or constraints, opening up competition to new players. It overcomes all the objections typically aimed at VoIP services, particularly for primary landline replacement. It also undermines the pricing structure of many existing high-margin (yet technically trivial) services. You can also modify the behaviour of existing services. For example, the number for directory enquiries can be re-directed to a rival ad-funded directory operator, not the incumbent fixed line supplier.

For much less than the cost of an IMS deployment, you can hand out PhoneGnomes, and build a platform business with far more features than could ever be deployed in IMS, and deploy them within weeks, not years.

Opportunities for Telcos?
If you’re a fixed operator, compete out-of-territory against rivals. If you’re a mobile operator, enter the FMC market with simple combinatorial services and without the nightmare of user-provisioned WiFi equipment and network handoffs.

More analysis on the impact of disruptors in Telco 2.0 Insider.

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