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Summary:

[qi:gigaom_icon_voip] Can Google be your phone company? The answer is yes. I came to that conclusion after I met with Vincent Paquet, co-founder of GrandCentral (a company acquired by Google) and now a member of the Google Voice team. Earlier today he stopped by our office […]

[qi:gigaom_icon_voip] Can Google be your phone company? The answer is yes. I came to that conclusion after I met with Vincent Paquet, co-founder of GrandCentral (a company acquired by Google) and now a member of the Google Voice team. Earlier today he stopped by our office to show the mobile app versions of its Google Voice service for Blackberry and Android. Google recently announced that it was going to make the Voice service widely available to users in the U.S. soon.

These mobile versions of the Google Voice service will allow folks to not only manage their Google Voice connections –- to access and playback voice mails, send and receives SMS messages and read message transcripts — but also make local and long distance calls from mobile phones. The apps are fully integrated with each phone’s contacts, so you can call via Google Voice straight from your address book. This is how it works:

androidgooglevoiceThe mobile app for Google Voice uses the regular PSTN connection to place a call to Google Voice, which then places a call out to the person you need to reach. Since these calls (and SMS messages) originate from your Google Voice, they display your Google Voice number for the recipients. The service needs a data connection but it isn’t necessary to have a Wi-Fi connection to place and receive calls. The wireless number you buy from the cell phone company becomes less relevant.

The Google Voice app essentially reduces the cell phone carrier to a dumb pipe. While the BlackBerry application is interesting, it’s the Android application that shows that Google has bigger designs. I have been playing around with the Android App for about an hour or so and I can see the broader implications. When I was setting up the app, one of the options I was given: to make all calls through Google Voice. And that’s when I thought to myself: Oh! OH!

The app is so tightly enmeshed with Android OS and the address book and other apps, you hardly think that you’re using Google Voice. If Google bundles the Google Voice app with Android and sells it to makers of cheaper feature phones, it can start to insert itself between the consumers and wireless companies.

This “man in the middle” position is Google’s strength. The company has inserted itself between consumers and information via its search offering and profited handsomely from it. Why can’t it do the same with this voice offering? There is anecdotal evidence that some consumers might actually be happy paying for their mobile service by listening to advertisements.

To be sure, Google Voice isn’t the first such service. Truphone and a handful of other startups offer similar services, but Google’s sheer size is what makes this a pretty interesting move. They also have a mobile OS and connections with handset makers such as HTC to get serious traction. In this summer of a lot of hot air from Google — Google Wave and Google Chrome OS, for example — this is the first interesting product with larger implications. Suddenly the idea of Google as my phone company doesn’t sound so preposterous.

  1. If it uses the PSTN, the user will still pay for minutes on his carrier network to use Google Voice. So how will it do call continuity if the connection is dropped? Google Voice may be free but talk time will still ride over the carrier network.

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    1. That is correct. This will be true until two things happen:

      1. The cell phone’s data connections become capable of supporting pure VoIP calls.

      2. Google enhances the Voice application to make pure VoIP calls, perhaps through the GTalk platform.

      LL

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      1. “1. The cell phone’s data connections become capable of supporting pure VoIP calls.

        2. Google enhances the Voice application to make pure VoIP calls, perhaps through the GTalk platform.”

        In both cases you are assuming that the consumer will have wifi / data connection. If s/he doesn’t, s/he is still going to have to use carrier’s network.

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    2. I wrote a blog post once theorizing that google would do this.

      http://blog.jhong.org/2008/01/g-bell-has-nice-ring-to-it.html

      the part that is missing, and the reason you still have to pay carrier, is because wifi is not ubiquitous. Remember, around the same time google bought grandcentral, they were also bidding for spectrum, so they could make wifi free everywhere you went?

      if they had that layer, then they could basically build a free cell phone network.

      presumably, they will make it so google voice routes traffic over wifi and VOIP whenever possible now too. presuming you use your phone at home/office a lot, that would at least shave off minutes used with carrier.

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      1. I’d like to see integration with gChat. When a call comes into my GV number, I should be able to take it right on my PC.

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    3. Paul

      Right now cell phone companies are offering pretty hefty voice only packages. The price of voice minutes continues to go down thanks to a lot of competition. I think you can get unlimited voice for $60 a month from a company like T-mobile. The point of Google Voice is that it obviates the need for multiple phone numbers and replace them with a virtual phone number – hence their tagline, one phone number for life.

      So now you can switch mobile numbers as many times on you want and still not worry. You can bounce around from one service to another without having to bother telling any one of your friends your new number. I think the impact of this service becomes even more profound when Google Voice comes out for the java-based phones.

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      1. Actually, unlimited voice on TMOB is $100/month, and your casual misstatement (off by 40%), given your assumed authority, is irresponsible (yes, I realize this is the comments section).

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      2. @coldbrew:

        Actually, I have unlimited voice on T-Mobile and it only costs me $49 a month for nationwide service. I also have the G1 unlimited data/texts for an additional $35. Basically $85 for unlimited everything.

        Please do research before claiming someone else’s statement is irresponsible.

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      3. Eric: Yes, when one “bundles” data, I understand that a better price can be had for an individual service. However, one cannot get unlimited, voice-only at a price of $60/mo. When you combine services that changes the proposition entirely. Thanks for assuming I didn’t do any research, but you are simply wrong.

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      4. @ColdBrew In March it was fairly widely published that T-Mobile took a $50 unlimited voice plan nationwide (Not bundled. It was a retention plan for existing customers). Not hard to imagine that some version of this exists (unpublished).

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      5. T-Mobile has unlimited voice for $50 for “preferred customers”–basically, people who have been with them for a while. It’s not available to new subscribers at that price.

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      6. Thanks for the assist guys, some people just don’t know how to do research. It was a plan that was offered to “loyal customers”. Regardless if it was for new/old users, it was still a plan they offered, which I currently have, no “bundling required”.

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      7. While this is all very inviting, I recall a very nasty monopoly that was broken up starting in 1968. That company was called AT&T. They put the screws to everybody. Most of the people interested in what Google can provide were not around then, so are unaware of the downside to a monopoly. There is another issue a much bigger one than what AT&T did, this one may be more daunting and nagetive.
        Its just not that they Google provide you with phone service,Google can prove you with all you need to be connected. if you have gmail, use google search, google apps, use anything that Google owns, you can bet that every aspect of YOU is known and all that data gets cross polinated across all data points including partners (3ed party as well). They will parse it and you are targeted with ads and who knows what else. The info can also be SOLD to so many other entities without your permission What are you willing to give up for Free?

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      8. @Courtney – appropriate that you bring up RBOCs in a discussion about Phone companies. Of the 7 original baby bells: Qwest has one, Verizon recombined two, and AT&T recombined four. Those are the companies that GV (somtimes) competes against.

        Any Google discussion brings up the privacy issue. I could be wrong, but I’ll believe that Google doesn’t associate/distribute any personally identifiable information. Their own ad revenue is so huge, I seriously doubt the incremental value of selling that kind of information would be worthwhile.

        You’re right – the potential for abuse exists – but hardcore privacy advocates have a lot of other companies to worry about (Acxiom?). And the most militant privacy advocates probably shouldn’t have an online life at all.

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      9. LOL. do we really think we have privacy? I think that that concept left the earth a long time ago.

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    4. Good point.

      The thing is that this can cut into services like international dialing. This saves you some moolah. There were apps (I remember one for windows mobile) which did a similiar thing. When you wanted to call international, the app would call the calling card company (which you could configure) and then dial your number.

      There is the long term prospect of VoIP too. Though that kind of VoIP can be banned by the carriers and some protectionist governments (India for example bans it)

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    5. True Paul, but the trick is that Verizon Wireless gives me 10 friends and family numbers (link:http://www.verizonwireless.com/b2c/splash/friendsandfamily.jsp)
      that are not charged airtime.

      So, by placing my G-voice number in my circle, I’ve cut a significant number of billable minutes. My bill just looks like all calls go to/from my G-voice number.

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  2. Om wrote: “In this summer of a lot of hot air from Google – Google Wave and Google Chrome OS for example…”

    We are all familiar with the famous Om brand of cynicism, but this might be a stretch.

    Hot air is when I claim that I can beat Michael Phelps in a swimming race, although I have never given you any evidence that I even know swimming. When I have products like the Gmail and Android already released and used by thousands and thousands of people, when I give working demos of the Wave to standing ovation and hold developer workshops across the world, you don’t call it hot air.

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    1. LL

      — Waiting for Google Wave invites/more details. I think you should read the Google Groups around Wave. You can run demo from your laptop: let’s see it become more available to people.

      — Google Chrome OS: not showing up until 2010. Even then it is hard to predict when it is going to really show up.

      Actions speak louder than words, and yes – call me cynical (or a realist) if I see it as hot air.

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      1. Eric Schmidt also said publicly [at Sun Valley] that Acer and HP may have netbooks out by Q4 this year – with Chrome OS.

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  3. Google voice on my cell phone? I feel dumb here… why not just use a cell phone? a call is a call is a call… or is it?

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    1. Um… the difference is that it’d be free.

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      1. How is it free exactly? You still have to pay for the so-called “dumb pipe,” n’est-ce pas? You have to use either the company’s voice or data network, unless you are on Wi-Fi. and you can’t be on Wi-Fi all the time.

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  4. The best feature of Google Voice is that you can use it as your main home phone service as long as you have high speed Internet. I am currently overseas and use it as my primary phone instead of having to pay for service through another VOIP such as Vonage. All you need is a free Gizmo5 account and a Linksys Pap2 or similar VOIP router. This how most people are already getting their phone service anyway my parents in the States have Comcast which worrks essentially the same way and is about $33 more expensive since GV is free. The only disadvantage is that to make an outbound call you need to dial through a computer. But if your computer is always on and if you have a smartphone or PDA you can dial from those also. As far as reliability GV is the only way we call our family and Ffiends in America and we have only had problems twice. Which is not bad for a free service. When people realize this killer feature of GV phone companies like AT&T, Verizon, Comcast, and Vonage should be quaking in their pants. Google is giving a way a service they charge over $30 a month for. I don’t know why anyone would keep their traditional landline.

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    1. That’s the point… in Portland Oregon, I don’t know of anyone who *has* a traditional land line any more. That would be duplication of the service they carry in their pocket.

      Of course, we also have the highest unemployment rate in the nation – 12% and rising. So even those iPhones and other smart phones are something we really rely on as a community built on technology and creativity, but are looking for best prices on for monthly charges for services and features as well. It doesn’t hurt that we are a hot bed for apps developers for mobile.

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      1. John From Ohio Wednesday, July 15, 2009

        I still have a land line. There are a few good reasons to have or (or keep one) and when bundled with DSL, it adds only about $20 to the bill. Some reasons:

        1. I am in a rural area and ONLY Verizon has a decent signal and it pops back and forth between 1 and 2 bars.
        2. 911 — I don’t care what they are saying these days, land lines are better for emergency situations.

        With Google Voice, now I can use my land line to make what would be long distance for free and not have to use my cell phone minutes.

        I can drop the Verizon monthly charge for international calls that discounts the rates to theft from grand theft.

        I can send text messages from my computer for free and reduce the charges. I use only a few per month and pay the 10 cents per, but now that can be eliminated for half or so.

        I have a lot of friends who buy long distance cards for U. S. calls! Not everyone is into the tech stuff! They do use a computer and Google, and they have land lines. They can get an account, throw away the clunky answering machine, and make their U. S. calls for free using an almost identical technique as for the cards.

        Our mileage varies!

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    2. Hi Mike,

      Very informative comment but i lost you on the VOIP router – overseas connection. Would you be so kind as to explain how that works?

      I’ve been hooked on Google Voice for near a month now, with Gizmo5 running as the desktop computer phone. It’s great. I’ve also noticed that my Google Chrome browser is open morning to night, with gMail, gReader, gVoice and gDocs always open. In fact, Chrome, Skype, Ashampoo, ZoneAlarm, and Gizmo5 are the only applications that run full time, all the time on my machine.

      There’s no doubt in my mind that once Wave is stable, i’ll live there. While Cisco is concerned that Google is challenging it’s Unified Communications & Collaboration Solutions, my experience is increasingly becoming one of “Unified Productivity” built around Google application and services. This is a challenge to Microsoft, whose desktop productivity environment totally dominates business.

      My first foray into application development was that of working on the first contact manager for Windows (pre 3.0). Okay, so i’m dating myself here. But one of the most difficult “productivity” challenges we had was that of unifying the sprawl of productivity resources so that they can be managed through a single interface. The “resources” included management and scheduling (time management) of all means of communication and contact. It also meant management of people and groups of people; the contacts. And finally, there were the producitivity applications themselves; the office suites and other editing tools that gathered information, analyzed it, re-purposed it and produced documents, graphics and charts that were then merged with other “resources”.

      Simply put, back then, productivity meant contacting more people in less time with higher quality exchanges. The quality of exchanges depended on information. A program of mass contact through merged mailings might initiate a contact schedule designed to run from mass mailing to qualifying phone calls and eMails, to the exchange of follow-up materials and documents, to face-to-face meetings and appointments.

      One of the interesting observations made by über productivity guru, the late great Peter Drucker, was that the introduction and wide spread use of the Personal Computer did not result in any kind of noteworthy productivity gains. In fact, it was just the opposite! That is until, the Internet landed on the desktop. Then productivity sky rocketed. The promise of the PC was fulfilled, not by the personal computer desktop client/server model, but by the Web. As a communication platform of universal access, exchange and collaboration, even the early Web 1.0 had an impact.

      For those with a contact-project management orientation, the promise of the Web is the unification of communications, collaborative computing applications and services, and the automated access and exchange of data. These could be said to be the three legs of Web productivity.

      What killed pre Web PC productivity i think was the overhead of manual input/output. A productivity management system was only as good as the information input and “quality” of the information input, and that was topped off by the automation of the contact part of the equation.

      When i first saw the Google Wave demo, i jumped out of my seat. The interface has incredible reach, sitting on a single Web platform for managing and working eMail, instant messaging, blog, wiki, multi-media management and document sharing. And now we have gVoice, which no doubt will bring that elusive aspect of audio and video communications into the Wave. With a single interface for communications and collaborative computing, and full platform of Web application and services behind it, they’ve got a real shot at unified productivity.

      That’s not to say Google will topple Microsoft any time soon. The monopolist has an iron grip on desktop business productivity. The near impossible barrier for Google is the ecosystem that has grown up around the Microsoft Office productivity environment. It’s also easier for Microsoft to “re-purpose” that environment with value added Web productivity, than it is for Google to replace it. As the exhaustive Massachusetts Pilot Study demonstrated, replacement is costly and disruptive to existing business processes and systems; even if the actual applications are free. This is about replacing an ecosystem that critical business processes are bound to. Which is more than the challenge presented by the more common view that the barrier is that of aging and increasingly brittle suites of applications, or the proprietary formats, protocols, and interfaces those applications and ecosystem API’s ride on.

      This is not to say that at some point in the future Google doesn’t similarly re-purpose the dominant productivity environment to deep connect into Google’s Open Web systems. But they better get rolling on that if they hope to succeed. The window of opportunity will gradually close as Microsoft transitions the monopoly base, the productivity environment, and, the bound business processes and systems to their Web centric unified productivity platform. I’m speaking about the Exchange/SharePoint/SQL Server/MOSS 2010 monster of a proprietary WebStack.

      One of the more interesting things OM mentions is that Android gVoice app is tightly meshed with the Android OS. I’m stuck on Chrome because i’m increasingly living inside Google applications and services – which run great on Chrome. No doubt Chrome OS and the evolution of HTML+ as both a rich application layer and, an über interactive document model, will enable Google applications and services to go way beyond their current feature sets. As the components of a Google grand strategy emerge, it comes as no small surprise that Google isn’t going to trust their future, and the future of the Open Web, to the good graces of Microsoft.

      Google has a lot on their plate. And so far the execution has been excellent. They continue to challenge and even take away the low hanging fruit that would otherwise be a piece of cake for Microsoft to leverage their monopoly into. Still though, i’m waiting for all the positioning and pieces to settle along battle lines still being drawn; and for the great battle of business productivity systems to begin.

      For the longest time i thought this race was one of Google replacing Microsoft on the desktop before Microsoft replaces Google on Web. With MOSS 2010 moving into public view, i now think it’s going to be about competing Web centered platforms of unified productivity services, where connecting device and desktop operating systems are optimized specifically for that vendors platform. Meaning, Microsoft has succeeded in protecting their desktop productivity monopoly, but now they are migrating the entire empire to the Web. And Google will do whatever it takes to defend their empire and the Open Web that business depends on. Even if it means moving into the operating systems business, and, challenging Microsoft in the arena of Web centered unified productivity.

      Ride that Wave,

      ~ge~

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    3. Can somebody please explain how they manage to make this free ??? Lets take the following cenarios:

      1) someone calls my GV number (I assume caller pays that call…?). GV redirects to my cell phone – how is this redirect free, or who pays for this ?? Is this a new phone call which is joined with the 1st one ??

      2) someone calls my GV number (I assume caller pays that call…?). GV redirects to my fixed PSTN line. – how is this redirect free, or who pays for this ??

      3) someone calls my GV number (I assume caller pays that call…?). GV phone redirects to my number which is a Vonage Voip number. Ok, this one is free.

      4) I make a call using my GV number, to a mobile phone number – this call is entirely free for me but not for the receiving party ??

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  5. Any word on an iPhone version of the app?

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    1. @Alex Rodriguez Check out ‘GV Mobile’ and ‘GVdialer’ as non-Google offered applications that use your GV account. GV Mobile is the cleaner of the two.

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  6. And why would cell phone network companies allow this to work and not cripple it ? Skype over 3G is crippled. Infact I worry these kind off things might slow down adoption of Android. Networks wouldn’t like it and will push back. Google is no apple, to own things end to end. Google basically destroys the market it enters, making sure nobody but itself is making money, while apple creates new markets by its innovation.

    This is not necessarily a good thing. Google doesn’t make capital investment in bandwidth/base station etc and just tries to drive the business it enters to the ground. This is not good for the long term wireless business, unless Google is willing to make some capital investments in that area. We wouldn’t be very happy if sprint/t-mobile go out of business and others are not willing to make capital investments get USA the next generation cellphone network.

    Not everything in the world can be replaced by ads :).

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    1. Venkatesh

      I think the argument for cell phone companies is that this is going to drive up usage of their voice networks. Perhaps force people to upgrade to higher unlimited voice plans.

      On your point #2, I think the points you make are spot on, but it is also good to keep some competitive pressure on the carriers too. As a consumer I like that.

      I totally agree – not everything can be replaced by ads. I hope not.

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      1. Yeah..the networks have been evil for a while..so part of me likes the fact that they are getting some competition. But I don’t like Google’s approach towards things. They lost me with Youtube and since have done things which makes me distrust them completely.

        If google’s history is anything to go by, they might suspend your account for good, with no justification. They will not have a customer care number for you to call and scream if something goes wrong. Why would anybody put their faith in such a company. Adsense account cancellation, gmail account cancellation/reset, Google search penalties, Appengine fiasco etc tells me Google doesn’t care and are worse than the networks if you depend on them for something.

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    2. Venkatesh,
      I don’t think you should/can compare Google and Apple; there will be those who might use the same argument to claim that Apple doesn’t innovate either (MP3 players and mobile phones were around before the iPod and iPhone, etc.).

      I disagree that Google destroys markets it enters; perhaps you mean that markets that Google enters get destroyed? Call it semantics if you will, but I don’t see anything wrong with entering a market, turning it on its head, and then executing the heck out of the business model.

      It all boils down to value creation for the end user; if a business/market no longer provides/creates value for the end user it is ripe to be wrecked and rebuilt. Businesses drive themselves into the ground due to their complacency and lack of innovation.

      I don’t see why this should be bad for the wireless industry. It’s going to change things, surely, but it doesn’t have to be bad change. It might result in separating the marketing and customer acquisition side of carrier business from the transmission and network operation side; there should be sustainable economics for the resulting businesses as long as they continue to operate efficiently and create value.

      Perhaps you mean everything in the world “shouldn’t” be replaced by ads, because it sure looks like everything “can be” and “may very well be.”

      In any case, it will be interesting to see how this develops.

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      1. I agree with your analysis and especially the part where you say “markets that Google enters get destroyed?”.

        regarding businesses not creating value. Take Mp3 for example. The delivery model for music was broken for sure and napster turned it on the head albeit illegally. What did apple do, it created a new delivery model in sync with current times. But it did not punish the musicians or music companies. Digital music sales is a new market segment in itself, created by Apple. Now they have done the same with appstore.

        Now compare that with Video. Video delivery model was broken. What did google do ? hide behind DMCA and wreck the legal streaming video market. There could have been successful video companies which streamed legal movies.But how would you compete with free and stolen content ? And what is the incentive for artist if all their music is stolen and available for free.

        All this free things exist till Google’s adsense program is cross subsidizing for it. Lets say Google revenue takes a plunge , what are the users left with ? Nothing !!

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  7. Om I know you pushed this out quick, but I’m expecting a longer thought piece (or three) late this week (or tomorrow?) on this subject… right?

    I’m pretty sure you have more than 3 paragraphs to say about this topic ;)

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    1. Dave

      I thought it was more than three paragraphs. :-)

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  8. Google Voice’s iPhone client is available right now from Riverturn.

    Check it out here: http://www.riverturn.com/iphone/VoiceCentral.php

    Thought you might like this as a hold over option.

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  9. i am excited for when we get Google video chat via our mobile handset in 3-5 years?

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  10. One thing to keep in mind is that placing calls through Google Voice will invalidate your mobile-to-mobile calling feature and you could get a nasty surprise.

    On the flip side, if you carrier offers a My Faves tyrpe plan (as T-Mo does), you could theoretically get unlimited outbound and inbound calling. (Set your GV number as one of your faves.) That’ll be another source of friction and I’d expect them to clamp down on that really hard.

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    1. Awesome point. Did not think about myfaves :) And the funny thing is that t-mobile (the only us android carrier) offers it !!!

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      1. Actually Verizon now has a friends and family plan that allows the same thing.

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