Small ISPs may be able to beat large mobile telephone companies at their own game of wireless Internet after all.
Informio, a new player in that space, has branded itself as a "Voice Web" provider. It is hoping to carve out a niche as a wholesaler of Web-to-voice translation for Web portals, Internet service providers and other Net enterprises. Informio, a 3-year-old Lexington, company, is just now bringing its complex business model to market, hoping that the time is ripe for wireless.
"We provide the UUnet-style ISP access, the Netscape-style browsing function, and Akamai-style Internet content delivery, and that's why we had to raise US$42 million in our first round, because building a network to build out all three of these things is significant," says Alex Laats, co-founder, president and chief executive of Informio.
Now live in 15 cities in the US, Informio claims Internet companies can have their customers call in to have content such as email read to them by a computer that uses text-to-speech conversion technology.
Informio's ideal market is a major Web portal like Yahoo! that would have text and streaming-media content to distribute to not only its customers' computers, but to their telephones, too, Laats says.
The market for this technology is big, he says. "The number of mobile phones is growing to a billion worldwide and the number of wireline phones is a multiple of that." Informio plans to interconnect such customers with Informio's turnkey voice Web service by adding a local phone number to their start pages. Regional ISPs are particularly important partners to Informio's market, he adds, since companies could easily enable voice access to email. Informio has yet to announce customers, although Laats claims at least one large deal is pending.
The market for speech-to-text translation is unproven as yet, but the low-tech alternative method of providing this service is labor-intensive.
Pioneered by New York-based Port.ru in Moscow, free voice-enabled email is provided by its Mail.ru service, through a deal with a local paging company.
"For end users, this service is free," says Andrey Vasilevsky, Port.ru director. But Port.ru has to pay its local paging partner the costs of providing at least five human operators to man the call centre and then read emails to Mail.ru users. Volume is relatively low, about 1,000 calls a day, and the wait time averages under a minute, Vasilevksy says.
Port.ru plans to expand the service - soft- launched in Moscow over the summer - into other Russian cities this fall as its popularity grows, he says.
US market participants note that such setups are hard to scale overseas and impossible in the US, where wages are much higher and human-powered services cost US$1 a minute. Voice Web market pioneer 888TelSurf, has found that even with economies of scale, speech-to-text technology market penetration in the US is not easy.
"We are focusing on the low-hanging fruit, the early adopters of this technology, and they are cell carriers outside of North America," says Ken Guy, 888Telsurf's cofounder and vice president of strategic marketing; 888Telsurf's flagship install is somewhere in South America. He notes that low personal computer penetration in Latin America makes the region a perfect market for voice Web. About three-quarters of 888TelSurf's South American customers dial into the service from landlines.
In the US, where 888TelSurf has a free voice Internet access service up and running, the portal only gets 1,000 calls a day. Guy says the service is a beta test launched for research, not financial gain. However, the company plans to hit the same wholesale market as Informio no later than this year, aiming at enterprises, Web portals and ISPs.
To compete in the US, 888Telsurf must build out its local access dial network. As its name suggests, 888TelSurf offers access over toll-free lines, an expensive business model.
Analysts believe voice Web companies that think "wholesale" are on the right track, since an increasingly mobile American society would want this feature eventually. But few Internet companies would have the time and resources to build the infrastructure from the ground up.
"When it comes to consumer apps like Yahoo!, for example, I think they have the ability to do that themselves," says Charul Vyas, infrastructure analyst at International Data Corporation. "But when it comes to enterprise applications and business applications, I don't know how comfortable enterprises are going to be with just giving their corporate information out to carriers -they might want a go-between like Informio."
The trick in picking between various voice Web providers would lie in gauging their scalability and ability to voice-enable a wide range of Internet content. Informio claims to be one of the first language-agnostic service providers, which should help pave its way for expansion into multilingual Europe by year's end.
