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Genband Acquires fring to Help CSPs Go OTT

Sarah Thomas
9/12/2013
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Communication service providers have long been grappling with whether to partner with or compete against over-the-top communications apps, but they now have a third option from Genband.

The networking vendor has acquired fringland Ltd. for an undisclosed sum. You might have heard of the startup for its two-way mobile video chat service that worked across any device and over cellular long before Apple Inc. (Nasdaq: AAPL)'s FaceTime did, but the service also includes VoIP calls and texting. (See Fring Punches AT&T in the FaceTime and Fring Brings Group Video Chat to iPads.)

Genband plans to add fring to its portfolio of communications services, which also include cloud communications, 4G voice, and WebRTC. CEO David Walsh, Genband's former chairman who took over the CEO slot from Charlie Vogt in June, says its goal is to give CSPs access to any possible communications method they might need to support. (See Genband CEO Quits, Joins Harris Broadcast and What's Next for Genband?)

"We want to be in a position that no matter where the real-time communications originates from, we have a solution for our carriers and handle multiple traffic types," Walsh says.

Genband will now offer fring to its 700-deep service provider customer base to white label and offer as their own. The company suggests it will be particularly valuable to fixed operators and cable companies looking for a mobile play or for mobile operators wanting to offer a cheaper roaming alternative.

For fring, the acquisition gives it a global reach and combines it with operators' billing, quality of service, and seamless routing mechanisms. In addition, Walsh says that Genband will continue to support fring's 40 million existing customers on its consumer platform.

A consumer mobile app might seem like a strange acquisition for a company that's long focused on the traditional fixed telecommunications space, but Walsh says it already has this type of offering on the enterprise front with its NUViA white-label Unified Communications-as-a-Service (UCaaS) offering. This acquisition adds a consumer element to its offering. (See Genband Constructs Cloud-Based UC Service.)

"Our game plan with fring is less about building over-the-top; it's more about building a software, cloud-based technical platform for our customers to offer OTT services," he says.

As to why fring in particular, and not one of its competitors like WhatsApp, or Viber, Walsh, a former private equity man, says most of these OTT players weren't for sale since they're too busy trying to steal CSP customers -- successfully, too, in some cases. Genband's expectation is that if CSPs aren't already cooking up OTT alternatives to remain relevant, they soon will be. And, it wants to be the name that comes to mind when they're ready to make a move.

"What we hear, talking to carriers and analysts, it seems like most carriers, MVNOs and cable operators are going to make a decision over the next 12 to 18 months," Walsh says. "We want to be in a position to be the solution when carriers start to move. We can get you into OTT and help you craft a product or service immediately."

— Sarah Reedy, Senior Editor, Light Reading

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Kevin Mitchell
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Kevin Mitchell,
User Rank: Light Sabre
9/12/2013 | 11:36:35 AM
Re: Worrying conclusion....
What's the breakdown on retail OTT vs wholesale?

Retail likely 99.5% of total subs and retail = probably WAY less than $5/year jusfing from Infonetics OTT report:

notes Diane Myers, Infonetics Research's principal analyst for VoIP, UC and IMS. "But the fact remains that most OTT mVoIP providers are making very little money per user. In 2012, the average revenue per user was a meager US$7.13 annually.

$50M for 40M subs x $1/sub/year? Where is the multiple?
Sarah Thomas
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Sarah Thomas,
User Rank: Blogger
9/12/2013 | 11:26:00 AM
Re: Worrying conclusion....
Btw, I had the number off by one zero. Fring actually has 40 million users today, not 4 million. :) Updated now.
jhodgesk1s
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jhodgesk1s,
User Rank: Light Sabre
9/12/2013 | 10:49:33 AM
Re: Cloud Voice Platforms
Kevin, agreed, the manner in which some operators gain access to applications is moving that way. Which applications will be the high runners will take some time to figure out.
Sarah Thomas
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Sarah Thomas,
User Rank: Blogger
9/12/2013 | 10:41:24 AM
Mobile first
Here's some extra color on the acquisition from Genband CEO David Walsh to Light Reading:

"Though we believe GENBAND fring will be an attractive "OTT in a box" offering for fixed operators, especially MSOs, the solution is primarily targeted at MNO, who need to get into the OTT game with a market-ready, low-risk, cloud-based offering...fring was designed for mobile environments and the company's early intellectual property was focused on solving mobile-oriented issues, such as a client that efficiently manages smartphone battery power."
Kevin Mitchell
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Kevin Mitchell,
User Rank: Light Sabre
9/12/2013 | 9:45:51 AM
Cloud Voice Platforms
This acquisition further highlights the emerging space of cloud voice platforms - a wholesale solution to help fixed, cable and mobile service providers to deliver VoIP services without actually building or running a network.

We at Alianza firmly believe that this is the true path forward. Others do too (Level 3 with Carrier Cloud Voice, BroadSoft with BroadCloud and others).

Will this be used to move beyond OTT to fixed VoIP? VoLTE?
Sarah Thomas
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Sarah Thomas,
User Rank: Blogger
9/12/2013 | 9:32:26 AM
Re: Where's the TDM?
That's true, Kevin. It's trying to make a push to offer all kinds of communications. Now that's it's shifted to all IP, it's trying to reinvest itself as the end-to-end supplier of operator', including PSTN, needs. TDM is definitely still part of that; just not the fun part.
Kevin Mitchell
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Kevin Mitchell,
User Rank: Light Sabre
9/12/2013 | 9:29:01 AM
Where's the TDM?
Interesting twist...GENBAND's acquisition history has been heavily loaded with aging, legacy TDM oriented gear (think of all those media gateway pick-ups and, of course, Nortel).

There's got to be a PSTN connection somewhere here...
Sarah Thomas
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50%
Sarah Thomas,
User Rank: Blogger
9/12/2013 | 8:57:07 AM
Re: Worrying conclusion....
Thanks for tracking down the number, Gabriel. Are you worried that fring's existing customer base will dissipate, now that it's a white label service too? 
Sarah Thomas
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Sarah Thomas,
User Rank: Blogger
9/12/2013 | 8:56:00 AM
Re: Worrying conclusion....
The timeline of 12 to 18 month does seem a bit long, since OTT has been in the picture for quite some time. But, I don't think most operators have a real strategy in place yet. There are some real exceptions like Telefonica Digital and Orange on the mobile front, but I think others are still figuring it out. fring is definitely a mobile platform, but my guess is they'll targeted their fixed customers more, offering them a way to add mobile to the mix.
Gabriel Brown
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Gabriel Brown,
User Rank: Light Sabre
9/12/2013 | 6:33:59 AM
Re: Worrying conclusion....
Reuters say $50M

http://in.reuters.com/article/2013/09/12/fring-genband-idINL5N0H726G20130912

I first used Fring back in the Nokia days (N70, N95). Holding these "communities" together seems harder than growing them in the first place.
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