Viber has just confirmed to TechCrunch that it is running an extremely limited test that would allow Viber to act as a “call terminator” — which refers to the carrier that offers the last (and most expensive) leg of an international call’s three-part process.
Along with offering Viber the ability to add new features to the free calling/messaging app, over 200 million users strong, this would also offer the Israeli-based startup an opportunity to monetize its entirely free service.
Right now, Viber offers free Viber-to-Viber calling with the option to complete the call through your carrier should the intended recipient be Viber-free. The app also offers free Viber-to-Viber messages with the same back-up plan via carrier.
CEO Talmon Marco mentioned this spring that monetization was on its way, but that it wouldn’t be with ads. Rather, Viber will offer value-added paid features to users, which founder Talmon Marco expressed would be “coming soon” in an interview with TechCrunch.
He also mentioned that deals with carriers were a solid option, wherein carriers could promote Viber in an effort to sell larger data plans. In fact, Viber recently signed a deal with an Indonesian operater called Axis to do just that. But in April, Marco also said that partnerships where Viber offered enhanced voice calling over a carrier network would be a viable option for a shared revenue stream.
This latest pilot test, originally uncovered by GeekTime and confirmed by TechCrunch, isn’t all that different. Viber has signed agreements with a few international operators (there are thousands all over the world) to become a call terminator.
To get any more detailed, we require a bit of context. Any call you make originates with your own carrier, like AT&T and Verizon, and is then shipped to an international carrier. Marco explains to me that historically, this international carrier leg of the call was the most expensive, due to subterranean and sub-sea cables. Now, however, it’s the last leg of the call that is most expensive, the termination leg.
Of course, a call can have far more than three legs. One international carrier can receive your call, from AT&T or Verizon, and then send it to another international carrier, and perhaps another, until the call can find an international carrier with an agreement in place with the right terminator.
You see, a terminator might be a local carrier in that final destination (let’s say it’s the Ukraine). However, a terminator could also include what’s referred to as “grey termination” — meaning that one end of the call was routed legally while the other end of the call was routed illegally.
Termination fees vary by country — some have relatively low rates per minute, whereas other countries (especially those that have stronger economic diasporic communities than those back at home) have higher rates.
There are a number of loopholes to enact grey termination and keep costs low, such as buying up a ton of local SIM cards or installing VoIP routers within countries with high termination rates. Almost any phone company, or even Skype, uses grey termination at some point or another.
Viber’s pilot program, while limited, allows the company to test out being a terminator. When a call is placed and routed to an international carrier, if said carrier has a deal in place with Viber, the carrier will ask Viber to complete the call to the recipient.
Viber then checks three things: if that recipient is a Viber user, if they’re online, and if service is strong enough to deliver a high quality experience. If all three check out, Viber places the call as a free Viber call to the recipient.
Viber also receives that termination fee, and likely at a lower cost than other terminators would charge.
As it stands now, this pilot test is rolled out to 0.0002 percent of Viber’s user base ‐ around 400 people. Marco repeats, “it’s a very, extremely limited test.”
Still, Marco explained that the average length of these calls (through Viber’s call termination) is generally higher than other international calls, which he credits to Viber’s high quality calls.
Of course, should the program extend into a full-fledged piece of the Viber system, it will surely generate revenue, but Marco claims that this is more about laying the ground work for value-added features. “We’re not testing revenue models, we’re testing our ability to deliver calls this way with high quality, along with many other aspects of connecting the Viber system to regular telephony.”
The founder ensures me that paid features are coming soon, and also mentioned that (should this system roll out to the entire user base) users would have complete control over it, with the ability to turn off receiving calls this way or leave it on. Perhaps that in itself will be a paid feature.
For now, however, the company is simply testing the international telephony waters.