Josie Sephton, Computing

At first glance, mobile VoIP has the potential to be a significantly more disruptive technology than its fixed counterpart, in both the consumer and the business market .The ubiquity of, and shift towards mobile communications is all too evident. In the UK, for example, in 2007, mobile calling minutes accounted for 40% of all calling minutes, and 70% of people with a mobile used it at home to make calls. Whilst mobile calling minutes accounted for less than half of all calling minutes, mobile revenues dwarfed fixed access and call revenues, accounting for 62% of the total.[1].

In the business environment, in terms of connectivity, the mobile phone is equally seen as a dominant device by mobile workers, which has achieved near-complete penetration at least for certain scenarios.

If we add the issue of costs to this picture of extensive use, particularly the costs associated with international calling, or for mobile roaming, as experienced by enterprises, the mobile VoIP proposition has the potential to carry an awful lot of weight. If there is one topic that is guaranteed to raise the blood pressure of the average corporate telecoms manager, it’s mobile roaming charges. The level of fees imposed by mobile operators on customers making or receiving calls when travelling internationally has been a bone of contention for many years.

The figure below is from research carried out by Freeform Dynamics with enterprises across Europe, and shows the importance to businesses of a number of criteria around mobile connectivity. After quality of service, cost related issues figure very highly.

CHART

Mobile VoIP providers clearly believe there are gains to be had, with players such as Vyke, Fring and Truphone becoming more prominent in the market. In particular, the business market is considered a potentially lucrative area to make gains. For example, I spoke recently to Vyke which is focussing on the enterprise space in addition to its usual consumer haunt. And it has an interesting story to tell. Probably the most compelling aspect of its proposition is that, beyond the handset (and there are some limitations around this currently), there is essentially no upfront investment.

However, in spite of this, the move to mobile VoIP is far from a fait accompli, and I suspect that mobile VoIP will only serve to disrupt a certain portion of the market. And the extent to which it will cause disruption within that portion is debatable. Whilst the numbers cited above on mobile usage hold true, in terms of fairly extensive use of mobile both at home and in the office, many of these calls will be to national landlines or other mobiles, which will be covered by bundles of minutes for a fixed monthly fee – many users, either through personal or corporate subscriptions, typically have big bundles of usage at their disposal. And the pricing of bundles has been set by mobile service providers such that the incremental cost between a relatively small bundle and a large one is not a big uplift. So, bringing mobile VoIP into this picture is unlikely to reduce costs for national landline or mobile calls, and may in fact increase them. Of course, if a user has used all their bundled minutes for a given period, and is aware that they have, then use of mobile VoIP may be more cost effective – providing the user has access to all the necessary pricing information to enable them to make an informed decision.

International outbound calls may see more benefit in terms of call cost reduction, but it is questionable why users would make international calls from their home countries via their mobile, unless they really needed to. And in such cases, various alternative approaches are available in the market.

Possibly one area where mobile VoIP does have the potential to make a big impact is for mobile roaming. International roaming charges are still exceedingly high, and for certain groups of employees, the costs associated with mobile roaming can be prohibitive. Mobile VoIP is not the only way of dealing with the problem, of course, and it will face competition from alternative means of communication. But if it can meet this head on, it may be able to carve out a respectable niche for itself, at least for the time being.

Ultimately, underpinning the success of mobile VoIP is the desire of the user (whatever the motivation) to embrace the service by identifying where it is financially beneficial to his or her particular usage profile, and working it into this accordingly.

[1] Source: Ofcom

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