(Editor’s note: Larry Golob is senior director of business development for Global IP Solutions, a technology creator of real-time voice and video over IP.)
When Voice over IP first began to get a foothold in the Internet landscape, traditional phone companies failed to realize the potential – and the threat – of this new type of communication system. This, in turn, allowed new businesses, such as Skype and Vonage to establish themselves as legitimate competitors to the baby Bells.
Now the technology, commonly known as VoIP, is starting to reach into the mobile marketplace – and wireless carriers are making just as many mistakes. As a result, a new battle is brewing – one that could result in major changes to the mobile landsacape.
The level of network usage for a mobile carrier determines the quality of service – so the rules governing how these resources are allocated is becoming a hot debate. Several carriers are facing legal headaches after capping bandwidth or blocking VoIP applications.
In Europe, for example, Viviane Reding, the EU Commissioner for information society and media, recently fired a strong message to a mobile operator. “Discrimination of Voice over IP services by operators with significant market power must not be tolerated by national regulatory authorities.”
The rebuke doesn’t affect U.S. companies of course, but the message is clear: The times, they are a-changin.’
While a number of smaller operators are offering more Internet access and pursuing VoIP and other similar applications from third parties, larger carriers are generally slower to move.
For many, VoIP is firmly in the crosshairs, despite the fact that VoIP traffic consumes significantly less bandwidth than other applications, including video. (Ironically, half of the companies’ mobile services are planning to launch or increase access to real-time video in the next two years.)
Making telephone calls (that have the same quality as a landline) over Wi-Fi takes up, on average, 24-32 Kbps. An HD voice call made via WiFi takes around 22- 96Kbps. The difference, you can see, is negligible.
HD voice, for those new to the concept, is telephone voice quality similar to digital or FM radio. Regular telephone quality, using this analogy, is akin to listening to AM radio while you drive under a bridge.
So while mobile VoIP appears to pose a challenge to the $692.6 billion global mobile voice market, there’s also a huge market opportunity for carriers. Data usage would rise dramatically, helping offset any loss in mobile voice minutes. Consumers, meanwhile, would have a superior telephone quality with HD voice.
Mass-market mobile messaging solutions that aggregate popular instant messaging and social network communities are pioneering the way. Some, like Nimbuzz, are offering one-click access to instant messaging and mobile VoIP calls with HD voice quality.
Nimbuzz users make more than 200 million VoIP calls each year, and the company is growing at a rate of one million users per month. This clearly demonstrates a demand for VoIP/HD voice. And, like Skype in the early days of VoIP, small companies focusing on it are growing at exponential rates.
Mobile operators have the opportunity to offer more features and applications to their customers, dramatically increasing data usage. Ultimately, this can increase their average revenue per user.
Unfettered high-speed access to the Internet will only inspire more innovation from mobile application developers and entrepreneurs. If mobile carriers can overcome their fear and get on board early this time, it can be a win-win situation for them, entrepreneurs – and, most of all, consumers.