For the past several years, mobile VoIP startups have been steadily pushing forward with innovative offerings to create new markets and build a growing user base from the ground up. Then, just a few weeks ago, Skype finally debuted its mobile VoIP offering for the iPhone and in one fell swoop, generated immense market buzz while simultaneously opening a Pandora’s box of industry concerns and fears.
Reports quickly surfaced that Apple had been forced by AT&T to limit Skype’s ability to run on the iPhone leveraging its 3G network, restricting use to Wi-Fi. In a similar move, O2 in the U.K. restricted iPhone Skype usage to Wi-Fi only, while T-Mobile in Germany banned the service completely from its network.
These actions are hardly surprising as operators scramble to react to what they obviously interpret as a major threat to their core business. This is understandable. Fears have slowly emerged about mobile VoIP companies cutting into operator voice revenue, and it was only a matter of time before the issue came to a boiling point.
WHAT COMES NEXT?
Now that we’ve gotten to this point, it’s imperative that we take a step back and consider the impact of outwardly blocking mobile VoIP applications in the long-term. For starters, operators would be stifling innovative technology and the natural evolution of the industry while entering into an ugly standoff with their valued subscribers who simply want to use their mobiles to communicate based on their own preferences. After all, subscribers are paying handsomely for an Internet connection on their phone – shouldn’t they have free range to use that connection however they’d like? It’d be akin to your broadband provider restricting access to YouTube because it has the potential to carve into their video revenue. Regardless, the outright blocking of certain technologies from networks is not a permanent solution, especially as the Net Neutrality debate carries over to mobile.
Take one look at what has happened in the music industry over the past decade, for instance, and it becomes quite clear that there is an easy way and a hard way to do this. Operators can put up road blocks here and there in an attempt to fend off a market that will continue to push forward in spite of their best efforts to resist, or they can recognize the opportunity and take steps to embrace and capitalize on inevitable change.
While it’s consumer use that has the market abuzz today, mobile VoIP has the potential to deliver substantial benefits to business users as well. Especially in today’s down economy when businesses are eager to cut communication costs, it’s only a matter of time before they look seriously to mobile VoIP as a potential money-saving solution. Operators undoubtedly fear that mobile VoIP could undermine voice plans just as VoIP did with landline services years ago. However, there are certainly ways for operators to remain competitive and achieve a sustainable ARPU with mobile VoIP as part of the equation.
For instance, we’ve seen a dramatic increase in demand for mobile social networks and Internet communities. Traditionally, users communicated via mobile IM and SMS, but mobile VoIP is now fast becoming the glue between these global communities, providing a means for users to communicate via voice – the Holy Grail. Social networks and communities have loyal user bases and are inherently very “sticky” as a result of being a primary lifeline to friends and family. Mobile VoIP, then, emerges as a means to enhance the communications experience versus simply providing a cheap calling solution. It empowers users to communicate however they’d like, regardless of where they are. And truth be told, this is invaluable.
PARTNERING FOR SUCCESS
Today, mobile VoIP is still very much in its infancy, especially when taking into account its significant growth potential. The opportunity exists then for operators to leverage this perceived threat as a component of their own growth strategies to launch aggressive service offerings and remain at the forefront of an ever-changing market. Otherwise, they risk being eventually marginalized by newcomers that will skirt their networks entirely and leave them in the dust. The beginnings of this are falling into place now and forbidding mobile VoIP will only expedite matters. With this in mind, suddenly, mobile VoIP providers emerge as strong potential allies for operators. Especially upon considering that mobile VoIP innovators already have years of development invested in their respective offerings.
Yes, today the ball is very much in the operator’s court, but it won’t be for long. Subscribers have made their demands heard and they will only get louder as time passes. Mobile VoIP represents a promising and natural step forward in the continued evolution of this industry and collectively, we have the power to create truly compelling offerings that will keep consumers and businesses coming back for more. Why wait?
Sharif is CEO and co-founder of Vopium, a mobile VoIP company.
Filed Under: Industry regulations