Jajah and Rebtel: my thoughts

Jajah and Rebtel seem to be two VoIP services about which the buzz over the blogsphere is growing more and more.

I already gave my thoughts on Jajah in the past, but now, since they have gone mobile, I would like to go in deep trying to verify what’s really happening around this VoIP service.
Moreover, yesterday I had the opportunity to give Rebtel a try (even if the test call hasn’t worked), so I would like to share my thoughts with you as well.

Let’s start with Jajah.
Basically, technically speaking, it works as a third party call control. Through a web page, you insert the number of your friend and specify the number where you want to be called back.
At this point Jajah servers call you, and a voice (btw: speaking a very bad Italian…) tells you that your friend is going to be called. Then you are connected to your friend’s phone.

I’d like to analyze this experience in the feet of a normal user. The driver for using this service is just one: money saving. No value added services, just money saving. Let’s break this subject into two points: from your PC and from your mobile.

Using a PC, the user experience is pretty easy. I can say it’s not difficult to setup a phone call. So, if I can save money, I have an interesting driver to do that. If the friend I’m calling is not a Jajah user and my call was from Italy to Italy, I’d pay 0.0230 EUR per minute. Not bad, but not even so good. Otherwise, if both numbers are fixed lines and my friend is a Jajah’s users, then the call is completely free.

Using a mobile phone the story is a little bit different. First of all, no free calls are available. Secondly, the user experience is worse, since I have to open an java/symbian software to use the service.
Moreover, we have to take into account the cost I incur for connecting to Jajah’s servers. I don’t know really how many KBs are exchanged between my mobile and their servers, but it’s clear that there’s a hidden cost there that we have to take into account.
I had to wait 20 seconds for the call to be setup from my mobile, but maybe it was just a matter of Murphy’s law Unfortunately I couldn’t hear anyone on the other side. I’ll try again later.
Alec got some statistics:

*In excess of 1 million users have registered for Jajah today.
*All their core metrics – registered users, minutes, and so on — are doubling on a monthly basis.
*82% of visitors hitting their web site try the service right away (that’s a phenomenal conversion rate), which Roman attributes to the ease with which you can make your initial call.
*They’re earning $10/month per user, with 30% margins. I estimate that means that they’re probably paying for about 550 minutes of traffic per user per month, but getting paid for 400 minutes.
*As volume has increased, their termination costs have decreased by 50% since February
*40% of revenues come from Europe. That’s also where the largest pain is.

In particular he says:

I should note that some Jajah competitors I spoke with expressed doubts about the veracity of some of these claims. My opinion? Jajah mobile could change the mobile landscape very quickly, making them one of the most important VoIP companies in the market today. It’s natural to find that a little too good to be true.

To be honest, I have doubts about these claims as well…

Rebtel
I think this service has basically two opposite faces: on one side, at a first sight, their business plan seems much attractive; but, on the other hand, in my opinion this service lacks in something which is essential for the success of a service like that: it must be easy to use.

Aswath well describes Rebtel’s user-experience in this post:

For $1 a week, you get two numbers, one local to your calling area and another local to your designated buddy. When one of you want to call the other, that person will dial their local number allocated by Rebtel; in turn Rebtel will ring the other person’s phone number. The called party can hangup within 30 seconds and dial their local access number allocated by Rebtel to be connected to the buddy and they can talk for free as long as they desire.

Some questions arise:

• is your friend willing to pay to talk to you ? I’m calling him and asking him to call a local number to talk to me. Is it always reasonable ?
• this said, which is the subset of users which will find this service useful ? who I’m going to ask for money ?
• who is willing to remember yet another phone number ?

In general I can agree with the general approach. Rebtel understood users’ preferred device is their mobile phone. But, Apple and Google teach us that ease and the meticulous care of the user experience is fundamental for a service/product to be successful.

I hope that investors (Index already invested in Skype…) already answered all the questions above.
Hey guys, 20M$ is a lot of money

Conclusions
Both services are going to the Voice 2.0 direction. As a professional involved in the VoIPsphere, I really appreciate that. This means that VoIP is not dead yet
At the same time, I think I’m missing something out. I would like (I think I’m not alone…) to get these questions answered:

- how many users are REALLY willing to pay for these services ? how many are willing to USE these services ?
- is there available place for another Skype-like deal ?

I’ve seen many people in the blogsphere writing posts where they praise Jajah and Rebtel. Unfortunately I use to arise questions rather than being excited too quickly. And, moreover, I usually tend to praise a service/application just if I personally use it because I find it useful.

Jeff Pulver, who I estimate for his great vision, drafted a great picture of Rebtel:

Rebtel is one of the most exciting startups that I have gotten to know this year. While on the surface they may appear to some people 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 and IP Communications. Simply put, Rebtel is well positioned to become a major force in the emerging world of consumer empowered Fixed Mobile Convergence (FMC).

He also writes:

One of the challenges that any startup faces is being understood. And I find it fascinating how some friends in the blogosphere hear about a new company and make certain underlying assumptions about them and never actually look deep under the hood.

So, what am I missing out ?

Technorati Tags: alec saunders, aswath, jeff pulver, luca filigheddu, jajah, rebtel