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| Tuesday, 22 January 2008 | |
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It is not a question of if voice over IP or VoIP is going to be the mainstream voice technology for mobile communications, but when. The all IP network offers no alternative. In fact many of us may already be using VoIP, and not even realize it reports Peter Purton.
In the world of fixed communications Skype caused quite a stir. A small group of programmers were able within a few years to build a global telecommunications network with more regular users than most national carriers. And to do it all with virtually no infrastructure of their own and with the best tariff in town – free.
So it is perhaps not so surprising that Hutchison 3 (www.three.com) also caused quite a stir among fellow mobile operators when it announced Skype (www.skype.com) on its phones as part of its X Series in November 2006. The real surprise, however, is that it never really took off in the way many had hoped. Perhaps the X Series pitch was too confusing to consumers – as well as Skype the phones supported a range of other Internet based services such as Orb remote PC access and Slingbox access to TV via your home set-top box or video recorder. Or perhaps the range of compatible handsets was too limited or not appealing enough to the right sort of consumer. With its £50 own-design Skypephone launched in October 2007, the company believes it has put things right and that Skype on mobiles can now really take off. “It’s a very simple proposition,” says Guy Middleton, 3’s head of corporate communications. “Just put in your Skype name and password and you’re up and running.” The link from the Skypephone to the 3 network is circuit-switched but after that it’s pure IP. The Skype calls are free as long as you are on a plan or top up more than £10 a month. And of course, it supports regular cellular calls too. The Hutchison 3 and Skype deal is just the first VoIP network operator alliance, says James Tagg, founder and CEO of UK-based VoIP network operator Truphone (www.truphone.com). He predicts that all mobile network operators will do deals in the end, it’s just a question of time. Fixed line operators may have been shocked by the emergence of Skype but they weren’t shocked to the point of being frozen. They did something about it, says Tagg. “If you look at fixed line operators they have all got some sort of VoIP product if only to assure Wall Street and The City that if things take off they are in a position to benefit from it,” he says. Mobile network operators will follow. Exactly how, when and with whom the operators conclude agreements “all depends on the vision of the CEO.” Tagg predicts that Q1 and Q2 of 2008 should see further announcements. Operators are no longer talking about whether mobile VoIP is going to happen but when it is going to happen, says Scott Reeves, technical director EMEA of Sunnyvale California based Ruckus Wireless (www.ruckuswireless.com). “They want to use it to stop other providers from eating their lunch,” he says. Imaginative entrepreneurs such as the team behind Ruckus is already working with carriers such as Belgacom, There are also a growing host of entrepreneurs looking to make their fortunes from mobile VoIP, perhaps even becoming the mobile Skype. One of the latest of these is Lungisa Matshoba, co-founder of Yeigo (www.yeigo.com), a South African start-up founded in 2005 but which has only been in commercial operation since October 2007. Skype has done a good job of showing what’s possible with VoIP but they are still mainly fixed Internet based, says Matshoba. The future is VoIP but the future is also mobile, he says. Commercially Yeigo is pursuing an aggressive partnership strategy aimed at linking up with third tier mobile operators or fixed line operators with ambitions in mobile. “We give fixed line operators a tool to leverage the mobile market,” says Matshoba. Another contender for the title of mobile Skype is Israeli company Fring (www.fring.com). VP of product marketing, Roy Timor-Rousso freely admits that the company is not generating “nor planning to generate” revenues. “Our entire strategy is based on building the relationship to the customer and on building the brand,” he says. The company’s plan is to build credibility and then introduce premium services via partners. And even there the tactics are hardly hard-sell. “We say to our partners – look at the numbers in 18 months and if they add up, then we can discuss revenue share,” says Timor-Rousso. VoIP, he points out, is only a small part of the plan. For a start he does not see his service competing with circuit switched voice. “We are not a replacement for a GSM operator and we do not pretend to offer network grade communications. But we offer a chance for users to connect to their chosen communities,” he points out. Any company that limits itself to VoIP calls will find itself competing with the commodity part of the market, he says. The key is to develop the user experience and credibility and trust from the consumer and connecting to his or her chosen community. For some players, however, call quality is more of an issue. Software downloaded from the Internet and installed on the user’s phone automatically recognizes when the user wants to make a domestic or an international. The former are just handled the usual way. International calls are rerouted to Eqo’s national number for the country the call originates in (Eqo offers service in 31 countries to date), relayed along its VoIP network to the destination country and terminated on the appropriate local fixed or mobile network. Calls are charged at local access cost (which could be a free bundled minute) plus the cost of terminating the call, typically 1.2 pence. Simon Edelstyn, Eqo’s general manager, Europe, says it has had 100,000 downloads of its client (which is just 250kbyte and takes 15 to 20s to download) and claims 50,000 plus users, most of whom are in the USA, followed by India, the UK, Italy and the Nordic countries. Despite Eqo’s call quality consciousness Edelstyn too believes low-cost calling is not where you want to be in the long term. “Our revenue model is based on revenue share from terminating calls but at a gross cost of 1.2 pence there’s obviously not much of a share to get,” he says. “We will be looking at developing value added services,” he says. The future lies in integrating with the web and extending the web, he says, for example, notifying people when a message is left for them on their social networking group. From a venture-backed start-up business perspective the challenge is in building a community quickly. And that is where the quality comes in. Eqo relies on viral growth of the business, says Edlestyn. “We’ll stand or fall by the quality of our service.” Just as Yeigo and Fring, Eqo is busy forging partnerships. Its targets are Internet service providers who are already triple play but are interested in becoming quad play, handset manufacturers and operators who are focused on the domestic market. VoIP is proving to be both a threat and an opportunity to mobile operators, says Fabien Maisl, marketing director responsible for soft switches at Boulogne, France, based access products manufacturer Thomson Telecom (www.thomson.net). On the one hand new rivals are using the technology to lure customers and traffic away from them. On the other hand they are realizing it can allow them to migrate their own networks to cheaper technologies and to launch new types of services such as convergence services and mobile Centrex where they can integrate mobile phones as though they were PBX phones. Vodafone and Bouygues already offer mobile Centrex in Ross Brennan, CEO of six year old Despite having built its business helping new generation rivals enter the market, most of the work the company is currently doing is with tier one operators, he says. “All have IMS strategies and have deployed IMS switches but what they don’t have is the client software to talk to the soft switches. That’s where we come in,” he says. The biggest problem mobile operators’ face in moving to all IP is the migrating from circuit switched voice, he points out. Circuit switched voice is very spectrally efficient, he says, and IP has overheads that make it less efficient in its use of spectrum. “If all the carriers business plans were going to work, there wouldn’t be enough spectrum,” he adds. He estimates it will be 10 years before we are really all IP Sanjay Dhawan, president and COO of Aricent (www.aricent.com), agrees it will some years before mobile VoIP will be mainstream. The trouble is not with VoIP itself – great improvements have been made in recent years, he says – but in the other technologies it relies upon such as IMS and WiMAX. Today’s attempts at VoIP are really more of a trial than real attempts, he says. When those major technologies come aboard, that’s when it will really take off, he says.
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