Mobile Voice-over-IP (VoIP) will be the ultimate killer application! SMS-over-IP (SoIP) will be the next one! The good news for consumers is that Mobile VoIP is being betatested by a new breed of Mobile VoIP startups such as iSkoot and Truphone. The bad news for Mobile Network Operators (MNOs) is that the betatests are coming to an end very soon. Then Mobile VoIP will be ready for the mass market.
In most GSM countries MNOs make 80% of their revenues with circuit-switched voice calls and 10 to 15% with SMS. Even in the mobile data paradise Japan circuit-switched voice revenues still account for 70 to 75%.
So what does a killer application do? Basically it kills a lot of exisiting revenues with the help of new technology. The result is a massive number of happy consumers that spend less for their favourite applications, i.e. mobile voice calls or SMS.
As I have expressed in many previous posts I am convinced that consumers really want the Open Mobile Economy which allows affordable, flat-rate based mobile access to their favourite big screen applications and services such as Skype, Google, Yahoo, ebay, Flickr, Youtube and the many other useful sites we visit on a daily basis. Unfortunately, this consumer demand is still unsatisfied in almost all mobile markets.
But there are signs of light. Usually the illuminated ones are the smallest operators that have 3G networks with a lot of unused capacity. In the UK market this is Three. Three is the fifth MNO having a hard time to catch up with Vodafone, T-Mobile, O2 and Orange. In December 2006, Three launched the X-Series project which is a Nokia N73 that comes preloaded with clients for Skype, Yahoo, ebay, Windows Live Messenger, Mobilcast, Orb and Sling. The next X-Series handset will be the SonyEricsson W950i. X-Series customers subscribe to a data flat rate with a fair use policy which acutally limits monthly data traffic to 1GB. Fortunately, the monthly limit of 5000 Skype minutes is not included in the GB.
I don’t know yet how well the X-Series is selling in the market, but early usegroup feedback of X-Series customers is positive. Moreover, X-Series will now be rolled out into the other Three markets including Austria, Italy and Hong Kong.
Interestingly, Skype on the Symbian device Nokia N73 is powered by the Mobile VoIP startup iSkoot. This is interesting because it looks like Skype itself has not been able to finish the Symbian client. In fact, iSkoot already supports a growing number of handsets and I am sure that they will soon announce further distribution deals with small, aggressive MNOs that offer flat rates looking for new customers for their underused 3G networks.
Of course, an alternative to Mobile VoIP over UMTS is Mobile VoIP over WiFi. And this is exactly the focus of UK-based startup Truphone that currently focuses on Symbian handsets, too. Truphone is based on the SIP standard and just raised €18 million lead by the German VC called Wellington. The advantage of Mobile VoIP over WiFI is that you just need an advanced Symbian device with WiFi and you can start making VoIP calls in any WiFi hotspot that you find. The biggest WiFi community called FON already has 250.000 Foneros, i.e. members that share their WiFi access among each other.
I am pretty sure that we will see Mobile VoIP making a big step forward and gaining many new users, be it over WiFi or UMTS.
Note: This article is available with links on the mobiliser blog.
