Telefonica Digital is the home of the Spanish group’s ‘telco 2.0′ and web activities, developing a wide range of new services and tools designed to compete in an over-the-top world. It has stood out as one of the most wide-ranging and credible of the mobile operators’ OTT divisions, but in such wild west territory for cellcos, it is sure to make some mistakes. It seems that the acquisition of VoIP service Jajah in 2009 may have proved to be one of those, since the operator is closing down the service on January 31 next year.
Telefonica bought Jajah for $207m four years ago but it has now informed account holders that they will no longer be able to make calls via the service. The operator insisted that other OTT apps, notably Tu Go, remain up and running, and indeed, these run on the Jajah platform. This suggests that the carrier acquired the start-up as much for its underlying platform, which could enable a range of over-the-top offerings, as for its actual VoIP system.
This may have been hard to monetize after all, even though, when Telefonica acquired the company, it said Jajah was used in 200 countries by ‘millions of people’, as well as ‘thousands of small-to-medium and large enterprises across the world’. At the time, Matthew Key, now head of Telefonica Digital, said the acquisition opened up ‘new capabilities in the voice communication space’.
However, carrier OTT voice is a tough market, given the dominance of Skype (which also pursues operator deals) plus Viber and Vonage, not to mention internal conflicts with the cellular voice cash cow, and other Telefonica service. The company recently also closed down its own Tu Me voice offering, though other Tu Go OTT apps remain. Tu Go, unlike Tu Me, does not eat into the core O2 services, but extends them to other platforms. For instance, a user can make a voice call from a desktop PC but see the cost taken out of their monthly mobile allowance, or can receive calls, made to the mobile number, on a PC or tablet.
Carriers need to forget about magicking the app out of the hat which is so good that users come rushing away from Skype. Instead, they need to focus on areas of the consumer experience which they control and the OTT specialists cannot, most notably the phone number and address book, and the billing arrangement. That is what the RCS initiative, now branded Joyn, is supposed to achieve by adding rich communication services to cellco platforms. So far, this has attracted limited support, and even adopters like Orange also have own-branded OTT apps. But RCS should come into its own when combined with VoLTE. At this point, carrier VoIP services should disappear since they will focus on establishing their own IMS-based VoIP service as significantly richer than Skype et al.
But Telefonica made other gains, even if it has failed with the consumer-facing product and brand. It not only has the apps platform but most of the original team, still enhancing that platform, and a foothold in the Silicon Valley world, which the cellcos are racing to comprehend.