Is Mobile VoIP A Telco Killer? - InformationWeek
IT Leadership // CIO Insights & Innovation
01:15 PM
Lean Analytics for 2018
Nov 27, 2017
Alistair Croll, Author of Lean Analytics joins AllAnalytics radio Nov. 27, find out more. ...Read More>>

Is Mobile VoIP A Telco Killer?

Customers change slowly, but they won't pay for voice calls forever if alternative apps save money and improve quality.

For many, it's a foregone conclusion that mobile VoIP (mVoIP) will demolish what remains of telco voice revenues. Recently, Juniper Research piled onto this prevailing wisdom when it released its report on Mobile VoIP, which projects a $5 billion loss of voice revenue by 2015. Thanks in large part to the quickly expanding availability of 3G and WiFi networks as well as LTE and HSPA+, Juniper forecasts that mVoIP will swiftly become the de facto standard for mobile users.

What makes mVoIP so potentially disruptive is its ability to let people send and receive phone calls via an Internet connection on a mobile device, thus avoiding the voice network altogether. Since the call takes place on an available network such as a 3G or 4G data connection or WiFi, the caller doesn't burn minutes or pay long-distance fees. In the past week, Rakuten, one of Japan's largest Internet companies, acquired leading mVoIP player Viber for $900 million. Could this acquisition signal that the tipping point is nigh?

The thing about such digital disruption, though, is that it's messy and tends to upend the most grounded predictions. How much and how quickly disruption eliminates value like voice revenue depends on many complex factors. But let's focus on one most tech executives know intimately: the human lag factor.

[Could startup Artemis's wireless networking technology change the mobile industry? Read Artemis Networks Calls or Wireless Revolution.]

People are being asked to change all the time these days. And let's be honest -- change is not what we do best. For more than a million years our ancestors seemed content to beat creatures with sticks. Then someone introduced the "tie rock on stick" idea, and we evolved. I'll bet good money, though, that there were holdouts. It likely took more than a few sticks + rocks to the head to bring the laggards around. (Ah, the good ol' days.)

In the case of mobile VoIP, millions have discovered low-cost or free voice apps such as Skype, Fring, Nimbuzz, and Viber, and they're willing to sacrifice some quality to get lower costs today. Given the dramatic improvement of quality -- and frankly, the poor service quality provided by most mobile operators -- why isn't everyone using these apps today?

The vast majority of us are not. We sign contracts, add some apps, and are for the most part fairly content to use the "out of the box" service. Let's call it the Law of Human Inertia: We tend to use what is given to us. And herein lies the opportunity for the telco operators.

Embracing mVoIP doesn't have to be a money-losing proposition for carriers, nor is it a free-but-flaky product for users. The successful telcos will figure out ways to monetize their services, such as delivering old-fashioned service performance assurance or creating novel features and functionality that both consumers and business users value enough to pay a premium. (Remember the iPhone?)

Human inertia gives the telcos time to redeem themselves. How long this window stays open is anyone's guess. There is likely a disruptive startup out there that will offer a mobile VoIP experience that's good enough to buy. Even the fiercest stick wavers will find value in a ubiquitous, high-quality service that works out of the box.

Engage with Oracle president Mark Hurd, NFL CIO Michelle McKenna-Doyle, General Motors CIO Randy Mott, Box founder Aaron Levie, UPMC CIO Dan Drawbaugh, GE Power CIO Jim Fowler, and other leaders of the Digital Business movement at the InformationWeek Conference and Elite 100 Awards Ceremony, to be held in conjunction with Interop in Las Vegas, March 31 to April 1, 2014. See the full agenda here.

E. Kelly Fitzsimmons is a well-known serial entrepreneur who has founded, led, and sold several technology startups. Currently, she is the co-founder and director of HarQen, named one of Gartner's 2013 Cool Vendors in Unified Communications and Network Systems and Services, ... View Full Bio

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
User Rank: Apprentice
12/29/2014 | 12:59:10 PM
Thanks for the great info on mvoip.  I hope to be able to use this in my business in the near future.  Mvoip  sounds like a great option for a small company wanting to build a great mobile option for less.
User Rank: Apprentice
3/6/2014 | 4:15:33 PM
Since i have discovered SIP, i no longer use native voip.

I recommend an app like mizudroid and you are ready to go with any voip service provider.
User Rank: Apprentice
2/23/2014 | 2:22:54 PM
VoX Mobile VoIP Android App
VoX Mobile VoIP Android App Recently launched Local Telephone Numbers to 57 Countries - Plan offers Unlimited Inbound Calling for $9.95 Global Phone Local Numbers Available In:- Algeria | Argentina | Australia | Austria Bahrain | Belgium | Brazil | Bulgaria Canada | Chile | China | Colombia | Costa Rica Croatia | Cyprus | Czech Republic Denmark | Dominican Republic El Salvador Finland | France Georgia | Germany | Greece Hong Kong | Hungary Ireland | Israel | Italy Japan Latvia | Liechtenstein | Lithuania | Luxembourg Mexico | Netherlands | New Zealand | Norway Panama | Peru | Poland | Portugal | Puerto Rico Romania | Russian Federation Slovakia | Slovenia | South Africa Spain | Sweden | Switzerland Thailand | Turkey Ukraine | United Kingdom | United States Venezuela
User Rank: Author
2/21/2014 | 6:07:02 PM
Re: Change IS hard
Tom, I had high hopes for Google Voice.  Now, I feel they know so much about my browsing habits, even if they did commit to Google Voice, I'd probably be hesitant to have them tracking my every call.  Of course with the NSA doing that, I'm not sure what's left to worry about.

Thomas Claburn
Thomas Claburn,
User Rank: Author
2/21/2014 | 5:25:02 PM
Re: Change IS hard
>But I have so many  business accounts for which that number is my primary identification/connection, the thought of notifying everyone to reach me now via my cell phone is just daunting enough to keep me from severing the cord. 

I feel the same way. It's telephone company lock-in. If I were convinced Google is committed to Google Voice, I'd port my landline to GV and just be done with it.
User Rank: Strategist
2/21/2014 | 3:53:29 PM
Data Plans
I guess I was late in the smartphone data plan but my voice minutes are unlimited, I pay more for data. I guess I might make up for some of it in Wi-Fi areas but I'm not seeing it.
User Rank: Author
2/21/2014 | 1:32:52 PM
Change IS hard
Your point that people, even when presented with a better choice, are often slow to change is an important one, and one of the paradoxes of the presumed efficiencies of a free marketplace  (or perhaps one should say, inefficiencies). 

I'm embarrased to admit: I know I should have abandoned my home wire line years ago.  But I have so many  business accounts for which that number is my primary identification/connection, the thought of notifying everyone to reach me now via my cell phone is just daunting enough to keep me from severing the cord. 
User Rank: Author
2/21/2014 | 12:22:28 PM
Related news -- I see Sprint has just announced WiFi calling for select phones:
Register for InformationWeek Newsletters
White Papers
Current Issue
Digital Transformation Myths & Truths
Transformation is on every IT organization's to-do list, but effectively transforming IT means a major shift in technology as well as business models and culture. In this IT Trend Report, we examine some of the misconceptions of digital transformation and look at steps you can take to succeed technically and culturally.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll