Messaging

Funambol: Open Source Wireless

We first covered this company a year ago. Now that cellular is the biggest challenge that WISPs are likely to face (other than government-funded fiber), it makes sense to consider offering mobile wireless data services (not voice) to your customers.

by Alex Goldman ISP-Planet Managing Editor [November 25, 2008]

Fabrizio Capobianco, CEO of Funambol, the Italian open source wireless project, has a message for the world. "Mobile open source will usher in the mass market adoption of mobile data services, specifically mobile email, and take service provider revenues to a new level," is his motto, and although it's not a short one, it's sweet news to service providers, especially those that compete with closed cellular networks.

The open source nature of the project enables Funambol to offer all the data services that customers want, he says, such as calendar and e-mail sync, and to offer them on more phones than any other software.

He underlines this point when I ask him if Android is a competitor. "Android is a mobile operating system. We do applications, such as content and sync. We have a Funambol client running on Android."

The key point here is that Funambol was compatible with Android as soon as Android was launched. "The more developers on more platforms, the better! A guy in Italy built the Android client for Funambol and we were live on Android from day one when Google launched it."

Funambol comes in two editions. There is the free community edition that is licensed under AGPLv3, which requires anyone making changes to the code to publish those changes. For service providers, there is a Carrier Edition that is not free and that is supported directly by Funambol.

Users of the Carrier Edition can host it themselves or have Funambol host it for them. "It includes additional specific code for webhosters to scale and support millions of users," says Capobianco.

Capobianco expects that most service providers will not want to share the changes they make to the code, and will therefore prefer the Carrier Edition.

Selling wireless data
Capobianco sees two distinct sets of customers for ISPs. There are residential customers who will not pay for the service, and there are business customers who are already paying for e-mail and will be willing to pay more for mobile e-mail.

For ISPs with residential customers, Funambol can enable an ad-supported product. Capobianco says that the e-mail app is the most utilized application on a cell phone. Cellular users prefer e-mail to web browsing. So it makes sense to deliver ads to the e-mail application, not the browser. Do so, he says, and you can get 500 impressions per user per month.

Since ads are sold per thousand views (CPM), a service provider can generate incremental revenue from every customer. Currently, there are few service providers selling ads, so prices are high, as much as 30 Euros per thousand. But let's say you get $5 in revenue and get to keep $2. In this case, you'll be making more money from advertising than you could charge your customer. Of course, you're accepting some risk in order to gain a potentially higher return.

For business customers, Capobianco says, the equation is different. Business customers don't want to see ads and are willing to pay you for the service, especially if you're already charging them for e-mail. He points out that putting an e-mail client on a phone is not enough. You need to be able to draw the contacts from the desktop computer and you need to sync up mobile e-mail with desktop e-mail. "We have it on the phone and backed up on a server. We sync down to the desktop too," he says.

In either case, if the service is profitable, you can afford to get prospects hooked on it with 30 days or even 60 days of free service. Once they've got their calendar and contacts in their phone, they won't want to leave.

The network
The reason you want to do data but not voice is this: there is not yet a perfect method for handoffs for mobile voice. Systems that allow mobile phones to stay connected on a fixed wireless network require a tunnel to the core. Handoffs between access points take time, possibly even several seconds. That's enough to drop a phone call, but it's a small hiccup in e-mail delivery.

"If you don't have connectivity for a moment, you won't get an immediate update," Capobianco says, "but then the push mechanism kicks in. E-mail is the kind of app that fits well where connectivity is off and on."

Conclusion
"In this economy in particular, there is a phenomenal opportunity for the ISP to get in the game," says Capobianco. "ISPs own the content. They have the e-mail. People who buy phones are willing to spend. The ISP can offer a service and go around the carrier. But this window of opportunity won't last forever. Google and others have plans for this market. Once you have the user and you have their contacts, backup e-mail, and their calendar, you have their life on the phone. Churn is pretty much zero."

— End