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Thanks to Wi-Fi Smartphones, Mobile VoIP is Growing Steadily

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Business Week today has a good summary of various mobile VoIP services that allow you to make phone calls from your cellphone over the Wi-Fi network. These apps are incredibly popular amongst people who use iPhones, thanks to services such as Truphone and Gorilla Mobile, while others like iCall will soon join the party. And that is just the beginning.

By 2011 the number of mobile VoIP users around the world may rise to 100 million from 7 million in 2007, according to ON World, a consulting firm based in San Diego. ON World estimates that in 2011, mobile VoIP voice services may generate $33.7 billion, up from $516 million in 2006, the most recent year for which the figure is available.

WiFi-based voice calls may not appear to make much sense in this era of $99, flat-rate unlimited plans, but when you have to make a lot of international long distance calls, the cost saving are humongous. I use Truphone on my iPhone and/or my Nokia e71 to make calls to my family and friends in India as well as to my sources, which are spread across the world.

There are times when I have used Skype (via iSkoot) on my mobiles to make calls, but Truphone is my service of choice. I save a lot of money when compared to what calls cost on the AT&T network.

No wonder phone companies don’t have much use for Wi-Fi unless they can use it off-load calls from the precious wireless spectrum to the Wi-Fi network. Others, like T-Mobile USA, have come up with a way to measure calls made via Wi-Fi hotspots and count them against wireless subscriber minutes, unless you sign up for an additional $10-a-month plan, Business Week notes.

So obviously they’ve gone out of their way to neuter VoIP services like Truphone. More recently, Nokia decided to take out VoIP functionality from some of its N-Series devices, like the N78 and the forthcoming N96, in what could very well be called carrier arm-twisting.

I think that if carriers want to compete with mobile VoIP they need to lower their long-distance prices to that of VoIP services. By using their network backbones they can offer convenience and quality to trounce the upstarts. The problem is that wireless companies will not make this logical move — until it’s too late.

Related Stories:

* 7 Ways to VoIP From Your Mobile Phone.
* iSkoot, Not Skype, Launched on Symbian.

13 Responses to “Thanks to Wi-Fi Smartphones, Mobile VoIP is Growing Steadily”

  1. Om – calls over WiFi work great if you are near a reliable hotspot – at home or in the office. To make truly _mobile_ international calls from anywhere you have to use some other services – there is a number of iPhone apps that do that.

    My current favorite is web app for iPhone.

    The international calls go through local access numbers, so you have full operator’s coverage (you do use your plan minutes though). The intl part of the call has really VoIP prices (from 1.3 c/min). Although it is a web app UI works smoothly and does not feel like a web page. Absolutely worth checking out.

  2. OM, I have used VoIP on my WinMo smartphone for years (skype) but it has been haphazard use and mostly limited to international calls, once every 6 months – maybe I need to get out more often :-). The problem with mass adoption of VoIP, is there is no clear and compelling value prop to the average mobile user, my grandmother for instance.

    She just wants to pick up her wireless phone, tap the digits and make a call and doesn’t want to be bothered with the skype client, skype out balances, EVDOrA/wifi connection, etc…

    In the carrier model (my job), the economic benefits are unclear, especially when a voice network is existing and generating revenue. Balance that with minute plans, free mobile to mobile, the case becomes even murkier. International calls seem to be the only use. Wait and see….

  3. charlie

    Om, you are right that truphone is competitive with AT&T during landline calls to India (truphone 10 cents, AT&T 32 cents). Truphone, however, is NOT competitive with AT&T to calls to Europe, Japan and other 1st world countries.

  4. A growing number of network engineers are starting to make plans for all IP mobile networks. This will require the gradual re-assignment of the channelized voice allocations (which are now more or less arbitrary form the cell site to the MSO).

    W will probably see the wholesale conversion within 5 years, but that is not to say that it will be flat rate, either. All IP over mobile is just a way to look at channel overhead.

  5. With all the mobile web data traffic being generated these days by new smartphones and the resultant load on backhaul as well as the need to build out network, you would think the carriers would love to provide a revenue generating UMA/GAN gateway service (such as [email protected]) to reduce their wireless carrier infrastructure overhead (new towers, additional backhaul fibre, financing, etc.) not to mention zoning and other regulatory issues associated with cell tower placement. With WiFi it’s actually the user paying the, say, $100 overhead to buy the hardware to create a WiFi access point.