The Inevitability of Mobile VoIP

For incumbents going after LTE for 4G, the concerns are somewhat of a different animal. “LTE on the other hand is geared more toward incumbent cellular carriers, who are more threatened by mobile VoIP in that instance,” said Dickson. Tier 1s have large networks already built out, and they still need to monetize the legacy investment in infrastructure and 3G spectrum. One of the ways they monetize that is with voice contracts, of course. “It’s a standard package,” said Dickson. “You get your bucket of minutes. They want to keep selling you those minutes. But they want to keep up with the market. So look at Verizon – LTE will be data, 3G for voice, in a Rubik’s cube of monetization to make sure there’s enough revenue to support itself.”

While mobile VoIP still poses a direct threat to operator voice revenue, it also represents a dynamic new capability that promises numerous applications. One new application integrates mobile VoIP into a unified mobile interface to social networking sites, which is the approach of services like Truphone – that offers the potential for interesting new revenue models via advertising and other Web-like approaches. In another new development, MVNOs and 3G operators without legacy networks are using mobile VoIP to more cost effectively add voice to data offerings. In yet another scenario, a few carriers are using a form of mobile VoIP, UMA, to support better indoor coverage and off-load macro networks via femtocells and Wi-Fi.

In fact, the main driver for mobile VoIP remains the proliferation of Wi-Fi and dual-mode smartphones, which will approach nearly 400 million units shipped in 2013. With looming net neutrality regulation that will make it difficult to block third-party applications, this reality has carriers taking note and bundling in Wi-Fi footprint access with their data plans, in a “if you can’t beat ‘em, join ‘em” approach. AT&T, for instance, continues to open up free hotspot access to data-plan users.

“We’re going to get more and more penetration in Wi-Fi hotspots,” said Dickson. “It just begs for some kind of mobile VoIP app, be it Skype, Google Voice, Vonage. The whole history for VoIP in general seems to be, let’s look for cheap or free. And as soon as you have ubiquitous Wi-Fi and lots of devices that embed Wi-Fi, it’s a no-brainer to implement VoIP. They need to grab a piece of that.”

Thanks to all of these new realities that are making it impossible for operators to ignore mobile VoIP for much longer, it’s evident the service will continue to be disruptive, with a slow but sure adoption curve. “The big thing to remember is that this is not something we’re going to look at in 2011 and say, ‘Oh, everyone’s using mobile VoIP, can you even remember when that wasn’t the case?’” said Dickson. “The movement to mobile VoIP will be much more akin to landline erosion. People are slowly but surely cancelling their lines – not instantaneously. It will be a migration and it’s a technology whose time has come – but it will be an evolutionary process as the business models shake out.”