Company profile: Truphone

• Tags:
• Cambridge Silicon Radio,
• James Tagg,
• VoIP

David Meyer ZDNet.co.uk

Published: 05 Apr 2007 09:55 BST

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Once upon a time, the only way to make calls on a cellular phone was via a cellular operator, most probably the one that gave you the phone. However, recent years have seen a revolution in the mobile industry and, while traditional operators still dominate almost the entire market, a few upstarts have begun to disrupt the status quo.

One such company is Truphone, a London-based internet telephony (VoIP) firm which, unusually, started life on an organic farm in Kent, yet which found itself praised as a "Technology Pioneer for 2007" by the World Economic Forum last December. The brains behind the operation is chief executive James Tagg, who made a name for himself as one of the driving forces behind touchscreen technology after working on the original Psion organiser.

"I have a degree in physics and computer science and I did an engineering degree, after which I started a company called Moonstone," explains Tagg. "One of the products that we developed was a radio for the Psion organiser using modified mobile protocol. The biggest problem we had with the radio was that it was detuned by the presence of your hand, so then we hit upon the idea that we could make a touchscreen out of that radio technology."

As a result, Tagg owns several patents on the touchscreen integrated circuits he developed with co-workers including James Collier, who is himself now chief technical officer for wireless specialist Cambridge Silicon Radio.

Then, in the 1990s, along came the short-range wireless technology known as Bluetooth. In the early stages of its adoption by the mobile industry, Tagg says he found himself wondering why there was "lots of radio technology out there but very few services that used it". It occurred to him that, if technologies such as Bluetooth were to become a success, it would in effect create a new voice network ripe for exploitation.

In 2000, he tackled the idea in earnest. His company, Software Cellular Network Ltd (SCN), filed patents and got in touch with venture capitalists, only to have its dreams dashed by a crash in the stock market which hit the telecommunications sector particularly hard. The idea's revival, says Tagg, came when Nokia introduced Wi-Fi-capable handsets in 2004, complete with SIP (session initiated protocol) technology that made them suitable for VoIP.

Tagg saw an opportunity. "In 2005 we were looking for funding. We were a technology company, but got interest from venture capitalists who said 'why not turn it into a service rather than selling technology?' Then Skype got bought [by eBay], and within eight weeks we were offered over £8m," he recounts. In May 2005, Truphone was launched as "the world's first software-only network operator", with a free-to-download client that could be used on Nokia's E-Series handsets.

What Truphone does is route calls through the internet, using Wi-Fi instead of the phone's cellular capabilities. It is not the only client to do this — its best-known rival in that space would be Skype — but the company claims that Truphone is the only one to take an exclusively IP-based approach. Tagg estimates that Truphone currently has a few thousand subscribers in 80 countries, with about 40 percent situated in North America and 40 percent in the UK.

"We're a telco," says Tagg. "We charge for minutes and receive in-bound termination fees [the levies charged for connecting calls to a network] from carriers. We just use Wi-Fi rather than GSM."

Of course, the user will not always be in range of their work or home Wi-Fi network, so Truphone has...

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