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Consumers and Businesses Should Look at Mobile VoIP Differently

by Leo Zheng

Mobile VoIP solutions are greater value propositions for businesses than they are for the everyday consumer.

Published: June 17, 2010

This blog is by Leo, a member of our marketing team and phone review expert.

VoIP calling on mobile devices is having a serious impact on the telecom industry and it’s showing. Every week, publishers are releasing updates to mobile VoIP apps, or announcing new features to attract downloads. There is a lot of buzz (or noise, depending on who you ask), but with the recent Juniper Research report prediction that there will be 100 million + mobile VoIP users by 2012, all the commotion seems justified.

Here’s what I think.

Mobile VoIP for Consumers

If you’re a consumer, you’re probably more interested in one thing than anything else, and that’s saving money. Mobile VoIP apps certainly allow you to do that, but only in a few situations. These applications are a great way to handle international calls, which would explain why applications like Truphone are more popular in Europe where there is much more international calling. VoIP calling is also much cheaper than going over your mobile minutes, so if you were on the tipping point for the month, it would make sense to switch over to your VoIP app.

But what about the buzz around inexpensive, and even sometimes even free, VoIP calling that will stick it to the telecom giants?

Whether you like it or not, the big carriers are involved. We’d probably all like to think that the companies that have been overcharging us for years are sitting back helplessly as VoIP innovation cannibalizes their voice revenues, but that’s probably not going to be the case, at least not for long.

Let’s take a look at the recent deals between Skype, arguably the most popular VoIP calling service in the world, and two of the biggest mobile carriers in the US, AT&T and Verizon Wireless.

A few months ago, Verizon Wireless struck a deal with Skype, allowing consumers with both a voice and data plan to use the VoIP service. Yeah, that’s right--consumers have to have both a voice and data plan, which ensures that Verizon keeps raking in money for their voice services. It also means that consumers are already paying for voice, and unless they are hell-bent on using just Skype, they probably will not choose VoIP as their primary calling method.

It’s a little different with Skype and AT&T. A few weeks ago, Skype launched an updated iPhone application, version 2.0.0. This new version allows iPhone users to make and receive Skype-to-Skype calls for free, and make calls to the PSTN at competitive rates. Skype-to-Skype over 3G will remain free until at the end of 2010, at which point Skype will begin charging a still unannounced price for Skype-to-Skype over 3G. Skype-to-Skype over WiFi, will of course remain free.

I expect that AT&T will be making some serious moves to ensure that they are making up for lost revenues (the Skype application has been extremely popular, with millions of downloads in the first few days of its release).

The point here is that even with the emergence of mobile VoIP applications, consumers are still going to be paying around the same for their voice and data services. The only difference is that some of the money may end up going somewhere else... directly to VoIP providers like Skype. However, with restrictive wireless plans in place, and both AT&T and Verizon talking about tiered data plan pricing (though this probably will not affect VoIP calling all that much), even that may not change.

Heavy Reading contributing analyst Bob Poe noted that the best, or perhaps even only, way mobile users would be able to save money with Skype is “if a wireless operator offered a cheap data plan coupled with a bare-bones (or no) voice plan”. And that’s not too common nowadays, according to Sarah Reedy from Light Reading. [Link]

Companies adapt with technological changes, and in this case, I doubt that AT&T and Verizon Wireless will allow their customers to save too much money with VoIP, without making it up somewhere else.

Where one revenue stream closes, another opens.

Mobile VoIP for Business

Now you may be asking: ‘If you’re such a skeptic about the adoption of mobile VoIP, then why the heck do you promote it for business?’ Good question! In my opinion, mobile VoIP for businesses is something that is quite different. Here, the focus is not so much saving money (though money saving is often a direct or indirect effect), but more about increasing productivity and convenience for your employees, especially when they’re on the go.

Skype logo Counterpath logo

While Skype and Counterpath's new Bria for iPhone [New Review of the Bria for iPhone app] are both mobile VoIP applications, there are huge differences between the two. Skype is a service in itself, while the Bria is literally a software phone that you can register and provision with your hosted phone service. This means that I can be reached at the beach on my work extension, I can transfer calls from customers to internal departments from the golf course, and even hold conferences with my fellow employees from the.. . You get the idea. From a cost savings perspective, the use of mobile VoIP for business is intended to be situational; calls from anyone on your network are always free, and calls to/from the PSTN will be charged at the rate determined by your provider. If I’m calling a customer, they see the same Caller ID they would if I called from my desk phone in the office.

Since mobile VoIP for business is more about taking your office with you (and for the most part, it is very successful) than saving money, there is nothing holding it back from being widely adopted.