Should mobile operators embrace over-the-top VoIP?

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Voice-over-Wi-Fi pioneer Kineto Wireless is trying to convince operators that if they can’t beat the over-the-top VoIP challengers like Skype, they might as well join them. Kineto is now selling a VoIP client and platform to operators that would allow them to bypass their own voice networks and offer their own cheap IP telephony services over Wi-Fi, LTE and even 3G.

AT&T has already started exploring such offerings. In November it began offering a smartphone app called Call International that allows customers to make cheap overseas calls. Verizon partnered with its biggest OTT threat, Skype, in hopes of attracting more customers to its data plans (though the service oddly uses its CDMA circuit-switched voice network).

But in both those cases, operators put limits on how the services could be used so customers couldn’t simply move all of their voice minutes over to unlimited or big-bucket data plans. Kineto VP of marketing Steve Shaw said there is still plenty of opportunity for operators to test the boundaries of an OTT services without threatening their traditional voice revenues. In fact, operators have done it once before, he said in an email interview:

To some extent, it’s a little like the calling card phenomenon in the fixed line market 10+ years ago. At the time, it cost quite a bit to make international calls from a fixed line at home. “Over the top” calling cards providers offered a way for people to access their service (via the [plain old telephone service] line) to get cheaper international calls.

In response, the [Bell operating companies]/incumbents could have simply lowered their rates, but instead decided to offer their own calling card service.

People who are price-insensitive or not tech savvy will continue to pay full fare. But for those who are willing to jump through a couple hoops, an over-the-top VoIP app from their own operator may offer a nicely integrated solution with better prices.

By that logic, embracing OTT in half measures may be a way for operators to stave off pricing pressures from VoIP competitors. Rather than lower all of their rates, they just target the segments of their customer base that are jumping ship to lower-priced platforms.


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