Recent months have seen some heated debates within the mobile industry about VoIP services on mobile networks.

In previous issues of Between The Lines, we discussed how high-speed data services for mobile phones have really come of age. (Read the article here). Mobile broadband and its applications are here – and that that includes VoIP.   In this article, we report on some of the latest moves and key trends emerging.

And not all mobile operators are ready to embrace VoIP as part of their service just yet. There’s a belief among some in the industry that VoIP technology lacks the maturity to deliver a guaranteed, high-quality experience to customers. There is also a big concern about the cannibalisation of existing call revenues. Some are even choosing, at least for the moment, to have contractual or technical limitations on Mobile VoIP usage.

Other providers see this differently – believing that mobile VoIP is an opportunity not a threat.  At least one of the mobile operators has highlighted its VoIP services as a key part of its mobile broadband packages.

DISRUPTIVE INFLUENCE

The arguments may well continue for a while but there’s no doubt that mobile VoIP is disruptive to the market.  The answer lies with customers, who will ultimately settle this debate. They will vote with their feet. And choose the approach that suits them, as has been the case in the fixed connection VoIP market, where the offering varies greatly from simple client software for the PC, to always on, feature-rich handsets with security and anti-SPIT (Spam over IP telephony) protection.

If the technology works, if the pricing and perceived value is correct, and if the service quality is assured, consumers will want it – even if it’s from a different service provider. And, if we accept that the technology is not quite mature enough at the moment, it surely will be in time.

So while mobile operators have every right to protect their core voice revenues, one strategy may be to bundle VoIP as part of the overall package. After all, there are some indications that the voice component of the mobile market may have peaked.

A recent JD Power survey found that pre-paid mobile customers are making an average of 10 calls a week, falling from 14 last year. Contract customers average 27, down from 35 in 2006, but those customers are now sending 46 text messages every week, up from 32.

With video calls increasingly an option, as well as Instant Messaging, the lines are blurring between what is data and what is voice. Those consumers increasingly used to everything running over broadband at home may dislike a distinction being forced on their mobile activity.

A RATIONAL ALLIANCE?

Some form of alliance between operators and the new VoIP providers could make sense. Standalone VoIP providers have struggled to make significant inroads against the established telcos, despite the head start of not having existing revenues to protect. Even where large numbers of PC users have started using services, this has not yet translated to success in the mobile arena. However these VoIP providers possess expertise and technology that could prove useful to the bigger players.

HOLDING THE LINE

Of course, holding the line and competing against Mobile VoIP also has challenges. The combination of more widespread Wi-Fi access, more wireless enabled mobiles and the right ‘consumer friendly’ software, might mean consumers challenging the status quo using IP services and high-speed bandwidth to cut mobile bills.

That said, most consumers don’t want to get their hands dirty with the technology if they can get the service they want at a reasonable price. Even the music industry would accept that illegal file sharers are still in the minority of the population as a whole, given that buying a CD is still the simplest form of acquisition for the average shopper. Legal music download services soared in popularity only when they became straightforward to use and cheaper than physical mediums.

GETTING IT RIGHT

What we were reminded of by the launch of iTunes is that a combination of the right product, timing and marketing can tap into a new market and almost overnight dismiss the naysayers. Get those things wrong and it could be costly.

If and when mobile operators see an upsurge in VoIP acivity, at least the technology and the networks are ready for the challenge.  BT Wholesale can play a crucial role with its new IP Exchange service: it facilitates the conveyance of native VoIP calls to all other VoIP ‘islands’ as well as to other traditional end users.