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Sonim SIPs $18.6M Funding

Light Reading
LR Mobile News Analysis
Light Reading
8/22/2002

Wireless voice over IP (VOIP) startup Sonim Technologies Inc. has just scored $18.6 million in funding from Apax Partners and 3i Group plc.

The San Mateo, Calif., firm is now pounding the streets attempting to sell U.S. and European carriers on the virtues of its "push-to-talk" system for GSM/GPRS. Push-to-talk technology enables mobile phones to act like a souped-up walkie-talkie: With the press of button a user can directly link to another person with a compatible device and hold a conversation with them.

Push-to-talk has been wildly successful for Nextel Communications Inc. (Nasdaq: NXTL). The business-focused operator has average revenue per user (ARPU) figures that are the envy of the industry at $70 plus. Over 20 percent of that ARPU is derived from push-to-talk services.

However, Nextel's push-to-talk system is proprietary to its iDEN network and only allows users within a few hundred miles of each other to connect directly. Sonim is going after a much larger market among the GSM/GPRS operators and says its system allows anyone on the network to directly connect.

The Sonim technology uses the session initiation protocol (SIP) to work its magic. SIP is a technology developed by the Internet Engineering Task Force (IETF) to enable systems that can handle voice and data communications between devices. So far, the Sonim system can transfer data between GPRS, GSM, and 802.1 networks. The Sonim system uses servers installed in the carrier's IP network. Selling these servers to carriers is what Sonim hopes to eventually derive revenue from.

To enable the direct connection on the client side, Sonim has developed a "SIP lite" kernel that resides on the chipset. It is working with chipset vendors to try and get the technology integrated on silicon. Sonim hopes to encourage takeup by offering royalty-free licensing to chipmakers.

Sonim is marketing its technology to carriers as both a real-time and store-and-forward model. The system can handle one-to-one communications and one-to-many, where the device user can select a group of people he wishes to send a message to.

Playing on the European carriers' love affair with the humble text message, Sonim is marketing its technology on the Old Continent as "voice-originated SMS".

However, although Sonim CEO John Burns tells Unstrung his company's technology is in "light trials" with a couple of carriers, there is no word yet on fuller testing or actual rollouts.

With the new funding, Burns says, Sonim can maintain operations without revenues for two years. He hopes that by then the push-to-talk market may have become established, but, if not, the firm will go after another round of funding in 2004.

— Dan Jones, Senior Editor, Unstrung
http://www.unstrung.com

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