Wednesday, November 15, 2006

WVOIP://A matter of rebalancing

The main question concerning VoIP is: can it do to wireless operators what is will do to fixed operators?

Many will say yes, I suspect, referring to things like:

Of course, there are similarities between fixed and mobile VoIP:

  • VoIP needs an always-on BB connection (but not strictly, see KPN's Slim or VoxLib).
  • Traditional voice revenues are at risk.
  • VoIP delivers cost savings and potentially better voice quality.
  • Free on-net and cheap off-net calls.

I believe there are some major differences between the mobile and fixed worlds, even if they can be dealt with:

  • Wireless licenses and spectrum are scarce. Perhaps less so when analogue TV spectrum becomes available. Also, when operators like 3 and Xfera enter the market, not te mention WiMAX and xMax.
  • VoIP blocking: there is no net neutrality debate in wireless (yet). T-Mobile however backtracked.
  • People use their handset differently from how they use a PC. Demand for things like mobile internet and mobile TV is unproven/low. Downloading clients is more of a hassle. Not when they come pre-installed.
  • Fixed BB is cheap because of competition, most notably infrastructure-based competition. There is no such thing in the wireless space.

Continuing on the last point, it would be my understanding that mobile operators have a chance of defusing the wVoIP threat slowly. They can make an offer to their customers saying: ditch your voice bill and take this data subscription! As long as it is priced at around the present ARPU for voice (+ messaging) + data.

PTTs have done this before, when there was no such thing as BB: rebalancing tariffs away from per-minute charges and toward monthly bills. The differences between mobile and fixed makes it harder for them to rebalance the VoIP-threat away than it should be for wireless operators.

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