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Interview with Mr Khaw Kheng Joo, CEO of MediaRing - i-Locus Research
iLocus Researcher: Sabiha Thakur
Singapore, 9 June 2006

Has the IDA, the regulator in Singapore, been supportive of VoIP?

Mr Khaw: I think the IDA is extremely supportive. They have even assigned numbers to the second tier players like MediaRing. We got 10,000 numbers from them for the VoBB offering.

Who does MediaRing see as major competitors in Singapore VoIP market?

Mr Khaw: We are not very focused on Singapore. Our revenue derived from Singapore is less than 5% of our overall revenues. We compete on a global basis and so our competitors are companies like Net2Phone and Deltathree.

Can you tell us about the opportunities that are potentially created for you by being a part of Google Talk federation?

Mr Khaw: Our view is that PC-to-PC VoIP as well as general Internet messages will become a federated network. What I mean by federated network is something like email. I could be having an email account with AOL and the other person with Hotmail. Although belonging to different domains, we can communicate. With PC-to-PC VoIP, if you want to call a friend you have to be sure that if you are on Skype your friend will be on Skype as well. I think that requirement is going away and we strongly believe in it. There we share the view point of Google.

Companies like yourself and Net2Phone were the first ones to offer PC-to-PC VoIP. So why did the service only gain momentum around services? Like Skype?

Mr Khaw: When Net2Phone and Mediaring pioneered the PC to PC service, we had millions of subscribers on the system too. Somewhere along the line we decided that we needed to create a revenue generating business model. That is the reason why we de-emphasized PC to PC. And we are not doing too badly. Look at the revenue that we generated last year versus what Skype generated as revenue. I can't deny Skype has had more publicity. At the same time, I think it is not true that we were not successful with PC to PC. When we offered that service there were millions of users on our system.

But then you also offered free PC to phone services at one point?

Mr Khaw: You need to put that in perspective. I think those are the old dotcom days when people thought that they could make money out of advertisements. I think you will find few business models moving towards offering free PC to phone anymore.

When free PC to phone services were offered by DialPad they signed up millions of customers but the company did not sell for $3 billion unlike Skype.

Mr Khaw: We all had millions of subscribers then, but we did not continue through with the free version. We were all under pressure to build a business based on some revenues.

What are the prospects of a free PC to phone call offering today?

Mr Khaw: Maybe free PC-to-PC VoIP makes a bit of sense for transaction based businesses like eBay and Amazon. But then there are few companies out there that offer free PC to Phone service.

Will PC become the residential gateway at home that integrates triple play applications or will it be the TV eventually?

Mr Khaw: That is an age old discussion. Personally I don't think there will be one all-encompassing platform. I think there are more single-purpose products in the market that are extremely successful than those that have a lot of functions integrated. Look at the PDA, you don't find a lot of people carrying the PDA that does a lot. We did mp3 on PDA way back. But, You take iPOD to popularize mp3 player. I think that at the end of the day the simplest one-function devices usually have a higher chance of being successful than multiple function things.

What is the distribution of your PC to phone subscriber base, which areas of the world do you have more subscribers in?

Mr Khaw: Today our major market is Middle East and Indo-China. In the Middle East I would think that we are a major player in the pure play VoIP area. I think we hold may be close to 20 to 30% market share there.

And which channels of yours has most of the customers in PC to phone, is it the direct brand or the reseller brand.

Mr Khaw: Both direct as well as private label.

You have an existing enterprise customer base. Have you thought of offering services such as hosted PBX to them?

Mr Khaw: We are not going in that direction. We have talked to a lot of our potential customers. It is our belief that most of our consumers would like to own the infrastructure and have control over how to make calls and things like that.

You used to offer Session Border Controller product. There was one installation and then we never heard of it again?

Mr Khaw: You never heard of it because towards the end of last year we decided to exit the business. Our retail business is going on well and we have decided that we need to focus on the retail side of business.