If you can’t beat them, join them. In 2007, that seems to be the philosophy of major cable companies, of which a handful have already inked deals with major mobile carriers to offer cellular service as part of a cable package. Can the integration of cellular and cable technologies aimed at providing low-cost international mobile service be far behind?
“It’s not a question of if or when this will happen,” predicts Jenny Fielding, chief operating officer of Switch-Mobile, an innovator in VoIP international calling service for mobile phone users. “It’s a question of who will get there first.”
“Integration is a revenue stream that cable companies are very interested in,” says Fielding, who is regularly invited to address telecommunications groups and conferences on hot trends in the continually evolving industry.
“Consumers like the idea of ‘one-stop shopping’ for their communications needs. That means any provider who can give them phone, internet, television and mobile service all on one bill will be positioned to take the lead in the market.”
A lot of revenue is at stake in the race to be the first to achieve full integration. In 2006, cable companies raked in more than $2.5 million from the more than 6 million American households that switched to cable phone service.
“Consumers see cable-based phone service as a cost-effective alternative to the phone companies,” says Fielding. “What’s more, consumers are beginning to view traditional phone service providers as yesterday’s technology. Couple that with a perceived lack of customer service, and the field opens up for more creative competitors.”
Some cable providers are already offering packages that integrate multiple technologies. Until now, the only piece that has been missing is the ability for mobile users to employ VoIP to make international phone calls.
The profit margin on traditional international calling is huge, and providing the service could open a bountiful revenue stream for cable companies. Switch-Mobile is uniquely positioned to fill the current void, Fielding notes.
The company’s patented Globe Dialer™ VoIP service empowers cell phone users to dial virtually any international telephone number at rates drastically lower than those charged by most cell phone service providers, and traditional land line providers.
Switch-Mobile’s rates are competitive with those touted by many calling cards, but without the need for users to dial lengthy access codes or PIN numbers, the uncertainty of actual air time available, and activation or maintenance fees. Further, Switch-Mobile bills by the second, rather than in minute-based units charged by many other service providers.
Cell phone users download the Globe Dialer software directly to their phones by creating an account on the Globe Dialer Web site. Users then program international numbers into Globe Dialer’s address book and the software allows them to direct-dial those numbers later at the touch of a button.
The caller’s existing cell phone plan handles the domestic portion of the call, which can fall under the plan’s free minutes. Switch-Mobile bills the international portion of the call at its deeply discounted rates – as little as 3.5 cents a minute to Argentina, 4 cents to China, and 14 cents a minute to India.
Launched in April 2006, during Switch-Mobile’s first year of operation, thousands of customers signed up to use the service. In November of last year, the company went international, launching in Scandinavia. Plans are in the works to add service in additional European countries in the first quarter of 2007.
“Still, don’t count the traditional phone carriers out of the game yet,” Fielding says. “All have VoIP development in the works, and are fighting the cable companies by offering DSL.”
“What all this means is further consolidation – phone carriers and cable companies will eventually team up,” she says. “When it comes to integration and staying competitive, no one wants their ‘leading edge’ to become the ‘trailing end.’ ”