Rebtel CEO: VoIP Is Just A Glorified Fixed Line, Mobile Is Where It's At

Rebtel considers itself to be one of the biggest threats to the Skype empire, so I was interested in learning from the company’s CEO, Andreas Bernstrom, how they felt about Microsoft acquiring their main rival for $8.5 billion in cash.

Unsurprisingly, Bernstrom said the acquisition ‘validated the market’ but he also had some more interesting things to say, mainly about VoIP and mobile telephony in general, and how financially sound the Rebtel business currently is.

For your background, Rebtel was founded in 2006, quickly raising $20 million in its first round of venture capital from investors like Benchmark Capital and Index Ventures. The company routes international calls made from from any mobile phone or landline to local numbers to minimize the cost of calling someone abroad.

Since their Series A round back in 2006, the company hasn’t raised a dime of outside capital, because, as Bernstrom says, they simply didn’t need to. In 2009, the company booked $18 million in revenues, more than doubling that amount the year after ($40 million).

Today, with a staff of roughly 60 employees, Rebtel boasts an annual revenue rate of $60 million and is profitable. For your comparison, VoIP company fring was founded earlier than Rebtel and currently has an annual revenue rate around $10 million.

To scale the business faster and ride the momentum in the VoIP space following the Skype acquisition, Rebtel is now considering raising more financing and has even loosely explored the possibility of taking the company public in the future.

Rebtel is banking on VoIP companies like Skype not iterating fast enough on providing services for smartphones users. Skype does offer mobile applications, but it has been rather slow in launching and improving them. Bernstrom points out that when the Microsoft’s acquisition of Skype closes, Rebtel will be the world’s largest independent mobile voip provider with more than 11 million mobile users and offering its services in over 200 countries.

Rebtel offers mobile applications for the iPhone, Android and BlackBerry handsets.

Bernstrom has a lot of respect for companies like Viber and the speed at which their mobile applications have gone viral, but posits that the dependence of its users on WiFi and 3G connections will make for a poor user experience.

What Rebtel aims to do is “offer the best of all worlds in a seamless integration”.

“VoIP is essentially an improved fixed line service. Mobile VoIP, however, has not been cracked due to the limitations of the data network. The next 12-18 months will determine who the winners are”, said Bernstrom.