VoIP on Cell Phones: Recent News Changes Industry

Posted by on October 13, 2009 in Business News, VoIP [ 0 Comments ]

VoIP systems revolutionized office phone systems and phone system capabilities allowing more businesses on-the-go capabilities at a low cost. Just recently, cell phone providers realized this could revolutionize the mobile industry as well.

Last week the media networks went crazy covering the two major VoIP service and cell phone developments. First, Verizon announced that it will be working with Google’s Android software and will begin incorporating it into their new cell phones. Therein, new Verizon phones will be Google Voice compatible. Shortly after this announcement, AT&T made public that they would be amending their current policy which restricted usage of VoIP applications such as Skype on their Apple products to a plan which almost fully enables VoIP. Pressured from customers, VoIP providers and the Federal Communications Commission, AT & T lifted the ban because it was interpreted as obstructing competitors’ applications and features thus preventing net neutrality.

These two announcements are just the beginning.  A VoIP service can now save a company money both in the office and on the go. Here’s a quick explanation on major VoIP options for cell phones:

  • Skype is one of the more basic VoIP applications allowing calls, instant messaging and less expensive international calls. Most smart phones allow Skype including AT & T products now after the announcement last week (before AT&T restricted Skype calls on Apple products to be available only in Wi-Fi zones). The application is free to download at the ITunes store or from the Skype website. International calls are relatively inexpensive but the fee per minute is dependent upon the country being called. Theoretically, AT&T customers could significantly lower their monthly allotted minutes if they were to use Skype for both local and international calls.
  • Google Voice: AT&T has blocked Google Voice in the past but is now reconsidering it; this is probably in light of the FCC’s investigation and Verizon’s new contract with Google. Google Voice is different than other VoIP applications because of how it routes calls – through a new phone number that is assigned to the user to an existing number the user assigns – and the features it offers. Users create one number to accept all of their phone calls and then the user decides which calls should go where. For example, mother in-law calls always go to the house while office calls always go to the cell phone. This streamlines all of communications while still offering voice mail. Much like how Google launched Gmail, Google Voice is currently accessible by invitation.
  • Vonage Mobile: Vonage offers free and inexpensive international calling (60 countries are free). Vonage Mobile is now available via a free application to IPhone, IPod Touch and BlackBerry users and operates much like Skype but the billing structure is different. With Apple products, calls made over a Wi-Fi connection are free while those outside of Wi-Fi will count toward monthly minutes used. AT&T customers will also pay a $25/monthly World Rate Plan to have access to the international calling benefits. BlackBerry’s will be charged for minutes used and the calls will not be made through Wi-Fi.

VoIP applications on cell phones with inexpensive long distance and international calling available on cell phones seems too good to be true but it is true… at least for now. The introduction of VoIP to cell phones could dramatically reduce any profits related to international calling and depending on service and application, VoIP could cut down on the monthly minutes used by callers. The huge profit losses associated with this will require a restructuring of the current US cell phone billing practices. It is probable that to compensate for these losses, the cell phone companies will increase data transfer charges or have a fee like Vonage for participating in the service. Until then, call all of your international contacts and celebrate, it could be free!

Some questions to consider that has not been widely discussed are: How will the cell phone providers deal with this increase in data transfers on their networks? Have they planned for this? How will this impact how VoIP services are provided in general? Comments?

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