By Alok Saboo on October 27th, 2009
I am surprised (and upset) at the reluctance of telecom companies (telcos) to embrace and encourage VoIP over their cellular networks. Today, I will discus why it makes absolutely no sense for the mobile carriers to discourage the adoption of VoIP on their networks.
Mobile carriers may be motivated to to block VoIP over their networks for two reasons: consumption of bandwidth and loss of revenue. Let’s discus each one of them:
- Bandwidth: Carriers may argue that sending voice signals may consume their bandwidth affecting the performance of the voice quality for the larger population. This simply does not make sense. Watching a Youtube video consumes much more bandwidth than a voice call of the same duration. With the explosion of smart phone usage, the bandwidth requirement will only increase exponentially. There are already several applications that consume more bandwidth than a VoIP call. Why penalize VoIP traffic? In fact, by moving some of the voice traffic to a different channel, the carriers may be able to save bandwidth on the voice channel, thereby providing better call quality to everyone.
- Loss of revenue: Mobile carriers, all over the world, make lot of money on international calls. So, if they allow consumers to make cheap VoIP calls over their network, the telecom companies fear that they will kill this revenue stream themselves. The underlying assumption here is that by blocking consumers from accessing VoIP over their network, the consumers will make expensive calls from their mobiles. This cannot be far from the truth. Services such as Google Voice make low cost VoIP calling extremely easy even on a regular phone. Several VoIP service providers (VSP) offer convenient local access numbers in several countries. A consumer may conveniently call these numbers and make cheap international calls. Further, there are various ways (even now) through which determined consumers can make VoIP calls over the carriers networks. The point I want to make is that price sensitive consumers will almost never make expensive international calls from their mobile phones. The price insensitive (business) users will not take the trouble to go through the (minor) inconvenience of using VoIP.
Firms must learn that they cannot prevent the benefits of technology from reaching the consumers for too long. This is a great example of “marketing myopia”, wherein the telecom companies are overly concentrating on the short term gains. Mobile carriers must stop thinking of voice as separate from data. By adopting common standards for voice and data, mobile carriers can increase the adoption of their data services among consumers and increase the Average Revenue Per User (ARPU). The objective should be to make a mobile an indispensible device, enabling telcos to increase the size of the pie and keep other technologies (e.g., WiMax) at bay.
I have a feeling that telcos agree with this. AT&T’s recent approval of Skype & Rebtel to use the 3G network suggests that we are (slowly) moving closer to the ultimate objective and you may soon be able to make VoIP calls over the 3G networks