Posts by Roland Hanbury

Truphone becomes a true phone

WiFi is still normally lower cost in the medium term

Several things:

3's Skype handsets only allow Skype to Skype calls, whereas Truphone allows calls to any telephone.

It is true that a given outbound call will often be the same marginal cost for a customer in the short term whether placed over WiFi or using bundled cellular minutes for network access via Truphone Anywhere, but that ignores the medium term opportunity of reducing the bundle size (and paying a lower monthly fee). Also, WiFi is typically much cheaper when travelling abroad. Truphone gives customers two good options, which work well together.

Truphone inbound via WiFi is useful for customers to make free Truphone to Truphone calls, for people who pay for inbound calls, and for those who don't have good cellular coverage. Truphone only makes a very small amount of revenue from inbound calls however, so giving customers more ways to save money on outbound calls is economically more significant.

T-Mobile terminates Truphone

T-Mobile's argument about the costs of the network is spurious

Amortisation, operation and maintenance of the physical radio network represent a tiny proportion of T-mobile's expenditure -- I would guess less than 5%. The rest is accounted for by marketing, customer service, finance & billing, call routing etc., all of which Truphone has to bear as well.

In addition, Truphone has additional costs, including software development on the handset and other start-up costs which, if anything, should justify higher termination charges than the established mobile networks. This was precisely the logic which was advanced by Hutchison 3 and accepted by OFCOM, which resulted in the very generous termination rates paid to them for the first few years of operation right up to the present day.