139 Million Users of Mobile VoIP By 2015
New research published my market research firm In-Stat suggests that over the last half decade mobile VoIP has rapidly gained in popularity as an inexpensive alternative to making international calls.
Companies such as Vonage, Skype and Cisco have all helped make this technology more reliable and much more viable for both businesses and consumers.
As mobile applications increasingly get integrated with social networking apps, the potential for this technology to achieve critical mass, transforming fixed line telephone usage into one comprised almost exclusively of mobile. As this change occurs increasing investment in the technology will take place, and by 2015, it is anticipated that the market will be valued at roughly US$6 billion, creating a significant opportunity for suppliers of equipment as well as services.
For business this transformation means that mobile phones will eliminate the limitations of space and time for transacting business, increasing their effectiveness. This presents a challenge to mobile telephony incumbents however, who must figure out how to embrace and montetise the technology before losing traffic to new entrants such as Vonage VoIP and Skype.
Skype for example already has 600 million users and it continuously expanding, recently it acquired Qik which enable iPhone and Blackberry device users to conduct two way video calls, record and share the video across multiple platforms. Skype itself is in the process of being acquired by Microsoft, giving it significant financial muscle.
Mobile VoIP is simply a method of making calls using your mobile phone and routing them over the internet rather than the network of an operator. The main reason why the technology has boomed is there are significant cost savings to be had. You can use the technology wherever there is an internet connection, either over a Wi-Fi network or through 3 and 4G.
Business can use their current wireless IP infrastructure to provide voice services across their corporate WLAN (wireless local area network). Traditional mobile phones have broad coverage which cannot be said for mobile VoIP, which is its primary limitation. Users will necessary have to be located at an access point.
Traditional Local Area Networks make use of cables for IP phones to send and receive data. With a WLAN however, RF capability enables users to access core business applications in real time. That is to say when a mobile VoIP phone powers one, it seeks out an access point from where it logs onto the network. As a user moves between locations, the mobile VoIP phone moves between access points as it moves out of range of one, and into the range of another.
The data is transmitted to a server where it is processed and routed, with the Access point becoming all important since it provides the link into the network. Some WLAN’s have access points that are connected to an Ethernet switch by cable. The switch provides access to gateways and the server to support wireless IP telephony. Other networks make use of wired to support wireless, with the wired component consisting of routers, switches, bridges all enabling wireless capability.
According to the report from In-Stat by 2014 the largest driver of VoIP revenues will be Europe, the Middle East and Africa, which should account for 39 per cent, Asia Pacific follows after accounting for 32 per cent, and North America brings up the rear accounting for 21 per cent.
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The Telecoms Market Continues To Transform As Landlines Increasingly Dissappearing
A new report from the US Federal Communications Commission suggests that nearly 90 per cent of Americans own a mobile phone with 25 per cent having cut the cord all together with their fixed line service.
The trend has meant that telecom’s companies are cashing in on the mobile bonanza, particularly when the report also suggests that the younger generation, aged between 25 to 29, abandoning fixed line in ever greater numbers.
This shift into mobile is no great surprise and has been taking place for well over a decade. It does mean bad news for companies who provide only landline services, but most telcos around the world expanded into mobile services as well. So many will indeed profit from the trend.
The report also suggests that whilst consumers are moving away from fixed line telecom, they are also demanding services beyond voice, and the mobile telcos are cashing in. revenue from data and texting has jumped.
Landlines disappearing has also meant that phone books are also increasingly becoming extinct, and it is unlikely that mobile numbers will be used instead. The trend may also result in cable companies increasingly shifting their focus to wireless and broadband as well.
The other great trend is the shift to VoIP telecom through services such as Vonage VoIP.
All these developments means residents of rural areas could face problems in the future, since it is difficult to find internet or mobile services in remote locations.
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Make Sure You Check With Your Alarm Company When Installing VoIP
Security companies are warning that the increasing adoption of VoIP for their telecoms services might have an impact on their alarm systems. New technology which enables phone calls to be placed via broadband rather than traditional copper based phone services offer enhanced features and lower costs compared to traditional services.
What most people are unaware of however with self installed services such as Vonage VoIP, if you also have an alarm system, that may lose its connection to the telephone service, rendering it unable to send a signal to the central station.
Even professionally managed digital telephone services result in the alarm system becoming unreliable, so to ensure that signals do indeed get sent by the alarm system, security companies are now installing wireless mobile communicators for their customers, which ensure even when a phone line is cut, communications still continue.
If you have recently switched your phone service you should call your security company an ensure they are aware, and offer advice on any precautionary steps you may need to take.
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Microsoft Patents VoIP Eve’s Dropping Technology
After acquiring its own VoIP calling platform, Microsoft is attempting to patent a technology that will allow the government or any one else who is interested and operates within the law, the ability to tap calls made using VoIP services such as Vonage UK
The company in actual fact applied for the patent in 2009 well before its recent announcement that it would acquire Skype, thus it is highly unlikely that two years ago it was preparing for just such an acquisition.
Microsoft has named the patent “Legal Intercept” which enables an eavesdropper to covertly record calls made over VoIP networks. The company has rationalized the development of the technology as a method to comply with requests from the government to enable them to undertake surveillance and wire tapping.
“Sometimes, a government or one of its agencies may need to monitor communications between telephone users,” the patent reads.
“Traditional techniques for silently recording telephone communication may not work correctly with VoIP and other network-based communication technology,” it reads. “For example, VoIP may include audio messages transmitted via gaming systems, instant messaging protocols that transmit audio, Skype and Skype-like applications, meeting software, video conferencing software, and the like.”
If Microsoft is granted the patent, it will enable Skype to placate governments who are resisting allowing the service to operate in their countries without the ability to tap or monitor phone calls.
Last year India threatened to ban Skype, Google and BlackBerry for failing to comply with its stringent security laws since the country faces an excessive threat from terrorism following the aftermath of Mumbai and other terror attacks.
In 2008 Skype itself was the subject of intense criticism, when it emerged that it had monitored calls on behalf of the Chinese government.
Academics say that whilst the technology is law enforcement friendly, it also means it is dictator friendly, and could have implications on popular revolts such as those that are taking place in the Middle East.
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Facebook Adds VoIP Video Chat Functionality To Platform
Facebook the dominant online social networking platform is intensifying its competition with Google by offering a free VoIP video chat service similar to Vonage VoIP.
The introduction of the video chat function is designed in large part to fend off the threat from Google which recently incorporated that feature into its social network as an alternative to FaceTime for Apple’s iPhone.
Facebook also unveiled a multi-person chat feature that lets several people hold online conversations at the same time.
“We’re using the best technology that’s out there for doing video chat with the best social infrastructure that’s out there in order to create some really cool new scenarios,” Zuckerberg said during a presentation at the event.
Facebook’s video chat offering makes use of technology from Skype which is Vonage VoIP’s rival, which itself has been the target of an acquisition by Microsoft who agreed to buy the company in May.
“This is a really strategic long term deal between Skype and Facebook,” said Neil Stevens, vice president and general manager for consumer at Skype, in an interview with Bloomberg Television. “This isn’t just a one shot one deal implementation of a product. This is a long term relationship.”
Google’s new site, called Google+, includes Google’s maps and images, messages, comments and other content from selected groups of friends, as well as a video chat feature.
Microsoft, based in Redmond, Washington, invested $240 million in Facebook in 2007 and entered an agreement to sell ads on the social network.
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Did Video Kill The Radio Star? Not Quite It Didn’t
Recently there has been intense debate over whether the revenue that incumbent telecoms operators generate from their bread and butter voice services is in terminal decline as innovative VoIP services such as Vonage VoIP have emerged competing head on with the incumbents. Many have been saying for years that the golden days of the telco are over.
Some analysts beg to differ, and make the case that voice still is and will continue to be a prosperous enterprise for operators for a little while longer.
Lack of Net-Neutrality
Earlier in the year The Dutch Parliament signalled its intent to become the first European country to officially legislate net neutrality. This would force internet service providers and operators to treat all types of traffic equally for all services including VoIP applications such as Vonage VoIP.
That was a huge deal for consumers, and was monumental for all Mobile VoIP and IP messaging applications in Holland.
However for net neutrality to become ubiquitous, it will take more than a single country, and all other countries must also adopt a set of similar laws and practice, which is inevitable, but is likely to take a while yet.
Until universal net neutrality becomes a reality, telecom operators legally have the right to block applications on their networks, or charge their subscribers extra for using third party VoIP, such as Vonage VoIP, to offset their revenue loss. Indeed some already levy these additional charges. With others likely to follow suit.
Operators Sell Bundled Services.
Most telcos actually sell their subscription plans as bundles of different services. Which means under a plan you get a defined number of text messages and a defined number of voice minutes, and that type of pricing is highly unlikely to change any time soon. As telcos face ever greater competition on multiple fronts, building an effective sales strategy is a powerful way to protect and enhance their revenues.
Feature Phones Not Dead Yet
It is no great revelation that smartphone sales have grown exponentially, with some estimating that in 2010, they grew by 40%. It is expected that in the year 2014, there will be 1.4 billion smartphone unit sales, and with the current adoption rate Nielsen reckons that smartphones will overtake feature phone sales in the US by the end of this year.
Clearly this trend represents an enormous opportunity for companies such as Vonage VoIP to target customers with mobile applications that are disruptive of existing business models. The market will be large enough for companies such as Vonage VoIP and Skype to take huge chunk out of Voice revenue of incumbent telcos.
However the absolute picture is much more important than the relative one. On a global level, feature phones dwarf smartphones by a factor of 4 to 1. It will be a while before that ratio becomes one which represents an existential threat to incumbents on a global level, though it must be said the ratio varies on a regional and economical developmental level, so the telcos at risk are the ones with the wealthiest customers, and who tend to be the biggest.
For now though, operators have room to breathe, the requirement for conventional voice services will continue unabated for some time yet. But they must start preparing for the new world order that in inevitable in the future, they must learn to embrace the future and not fear it, to not let equity markets and share holders seeking immediate returns drive their planning for a sustainable future, one in which they survive the internet protocol transition.
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