Telcos: is being an incumbent the shortest path to trouble?

The launch of Jajah in 2006 is probably one of those extremely interesting events in an industry. These days, they seem to be pursuing an objective of acquiring more share of market and consumer attention with their offer for free calls for Christmas. Since I now have some data to crunch on how Jajah's changed my pattern of consumption, I thought it interesting to do the analysis. My conclusions may not be statistically significant, but I guess they will give you more reasons to consider Jajah very seriously.

I downloaded data from Jajah (they have this neat service of delivering your traffic in Excel sheets) and also accessed my purchases of Skype Out credits.

Let's start with my Jajah consumption data for February through November 2006:

• my monthly budget is in the region of 8 €



• I am placing about 14 calls a month using Jajah



• the average cost per call was in the region of 0.6 €

During the same period, I continued using Skype a lot for computer to computer calls or for conferences with several people all on Skype and I still bought some credit on Skype although (much )less than before: until now my purchases of Skype Out credits for 2006 are 55 € and I still have about 7 € on my account valid till June 2007, while in 2005 I purchased Skype Out credits worth 85 € and in 2004 credits worth 75 €. So I guess there's been a transfer of part of  my Skype VoIP budget to Jajah, while my overall VoIP budget went up 62% in 2006, with the share of VoIP in my consumption of telco services being over 250% bigger in 2006 than in 2005.

Now making a rough analysis of my yearly budget in connectivity services (telco + ISP, not GSM because I don't have access to my consumption data right now, but I know I dramatically reduced my roaming traffic thanks to Jajah and Skype), I notice the following interesting points:

• while my consumption of connectivity services and the time I spend online has increased, my yearly budget is now half what it was in 2004



• the share of my budget that goes to my ISP increased because my ISP is now also offering VoIP telephony and a fixed budget for domestic calls after 18:00



• the share of my budget that goes to Skype grew much less in 2006 (+12%) than it did in 2005 (+60%)



• I spent 50% more on Jajah than I did on Skype, which is not that bad for a service that got notice of and tried only in February

So I guess that this confirms many of the trends professionals of the telco business are seeing on the market andit should be good news for Jajah and Skype. It does confirm Jajah's claim of being a killer of roaming and I think this space is interesting to watch because the nature of impacts that the telco industry is going through with the wave of adoption of disruptive web tools is likely to be valid in other industries as well. By nature of impacts I mean that the sources of value are changing from "the privilege of access" to "the imperative of customer experience". Access is no longer the issue; customer experience is more than ever, which makes product and service design all the more essential.
That makes people even more important because they represent competencies that ultimately define the performance of a business. And I think that's quite a quest in business.