Internet telephony on mobile phones is on its way and whilst the potential for lower call costs is great news for consumers and businesses, mobile operators face a fight to hang on to their traditional voice revenues.
One of the major themes at the 3GSM conference currently taking place in Barcelona is the flashily titled fixed-mobile convergence, with Nokia announcing a new dual-mode handset, the 6136, that is capable of making calls over traditional mobile networks, as well as over wireless broadband connections.
The handsets use Unlicensed Mobile Access (UMA) technology to route calls through a wi-fi connection, if within range, seamlessly transferring to route over the standard mobile network, if no wireless connection is available.
Nokia is, however, not the only manufacturer working on dual-mode cell-Fi mobile phones, with Reuters quoting a Gartner estimate that 20 million of this type of phone will ship in 2006 alone.
In stark contrast to 3G services, where users have proved particularly reluctant to pay extra for add-on services, the attraction of so-called cell-Fi phones is the call cost savings they can offer.
VoIP over fixed line services is already taking a sizeable chunk out of the revenue of traditional telcos. Just taking our company as an example, we use a VoIP service from InClarity in the office, whilst for home use there are a variety of services on offer.
Skype is a name that is familiar to many but there are a plethora of home services out there including the “does what it says on the tin” VoIPCheap, which offer free calls to the other side of world. Sure the call quality at busy times might not always be great but, hey, at that price I’m not going to complain.
The mobile operators are desperate to avoid the fate of the traditional telcos which are slowly becoming little more than a utility company providing the broadband pipes.
Nokia says the mobile operators have nothing to fear, pointing to companies such as France Telecom, which through the ownership of ISP Wanadoo as well as Orange, should be able to offer new and flexible service plans. BT has already shown the way with its Fusion phone.
Call quality will be an important in determining the rate of early adoption but as and when wi-fi capability filters down to middle market, mobile operators will face a very real challenge to hang onto their traditional revenues.