Tuesday, April 20, 2004

Daiwa EuroTelcoblog No. 38, Tuesday 20th April, 2004: P2P network Morpheus launches VoIP service

Since the launch of Skype last August, one of the questions we have been continually pondering and debating with clients is: what response might we see from others with a background or established presence in the P2P space, or indeed in other segments of the internet world? At the time Skype launched, we made much of the association with KaZaA, and said that this would probably contribute to some high profile press coverage and rapid uptake of the service. Now, 10.6m downloads (and we estimate 4.5m active users) later, this indeed appears to have been a correct assumption. Today brings the launch of a VoIP service from P2P network Morpheus, in conjunction with i2Telecom (ITUI US). Morpheus' parent company, StreamCast Networks, will be offering a white label version of i2's MG-2 InternetTalker SIP-based analogue telephony adaptor-based service, which purports to work in a narrowband environment. The "Launch Special" tariff (until 15th May) for the "Morpheus Voicebox" product offers the box at the normal price of $49.95, with free activation, plus a coupon for a free second box and free activation. After 15th May, an activation fee of $25 applies. On-net calls are free, and the company has announced three tariff plans:

Unlimited Global Community - $6.95 per month, calls to US/Canada 3.9 cents per minute, discounted international calling - this is the basic plan to which all Voicebox users will subscribe

North America 1000 - $8.00 per month for 1,000 inclusive minutes to US/Canada, overage charges of 3.9 cents per minute + the basic $6.95 Community fee = $14.95 total

North America Unlimited - $18.00 per month for unlimited calls to US/Canada + the $6.95 Community fee = $24.95 total

This is hardly a Skype-killer, and in many ways it is difficult to find anything to distinguish the service from the countless other ATA-based services out there, unless we're missing something. However, what is of genuine interest is the fact that this is a "youth"-oriented internet brand with some clout (Morpheus claims 122m downloads to date) trying to leverage its installed user base with a targeted affinity offering. It is also interesting to see an ATA-based service taking a global approach in marketing, apparently shipping to anywhere in the world (Vonage and similar companies have thus far adopted a market-by-market service launch approach). We don't think it's an earth-shattering event, but rather further evidence of how those with a significant internet presence might seek to exploit voice as a commercial opportunity or service differentiator at the expense of traditional telcos.


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