Prepaid Voice over IP (VoIP) and mobile VoIP forever changed the way long distance is bought and sold, especially internationally. But that disruption is far from over. As these technologies mature, service providers are becoming more innovative than ever before in their applications.
In recent months, we’ve seen mainstream mobile carriers more openly support VoIP, and at the same time we’ve seen a rise in smaller, nimbler providers looking to bundle VoIP with video, chat and other collaboration tools for tablets, smartphones, softphones and computers. With that, there has been a push to make every mobile device capable of carrying two or even three phone numbers, each with its own voicemail, chat and other features. And, as business users increasingly demand consumer-style IT, these IP-based communications applications will be extended to the business PBX.
Here we explore five disruptive long distance technologies or trends that will further drive change in the international long distance market.
Mobile VoIP Applications Go Mainstream
When Telefonica announced in May that it would begin offering mobile VoIP service on iPhones and eventually Androids, it sent one sign to network providers, Mobile Virtual Network Operators (MVNOs) and resellers – mobile VoIP applications are about to boom in a whole new way.
“When I read about (Telefonica’s) TU Me, my eyes popped out of my head. Next, US carriers will follow,” said Micah Singer, CEO of VoIP Logic, a provider of hosted VoIP network and services.
For a company like VoIP Logic, that will translate into many more service providers as customers.
“A couple of years ago Sprint outsourced its mobile network operations to Ericsson... it was a sign that the largest operators realize it’s more efficient not to operate their own infrastructure, and that’s pretty cool for us,” said Singer.
Mobile VoIP applications allow calls originating on a mobile device to connect to the internet either through a Wi-Fi hotspot or a 3G/4G connection. Once these calls hit the internet, they’re routed as any other data would be, which means they’re not subject to traditional mobile carrier pricing. That generally means that domestic long distance is offered free and international calls can be offered at a fraction of the price of either traditional or cellular service. Generally these plans are sold in prepaid programs.
Carriers have not always been receptive to mobile VoIP, and at first they locked down their phones to third-party apps for fear their own services would be cannibalized. But Net Neutrality laws prevented any internet provider from blocking what kinds of content could run over the internet, and when AT&T opened the door to third-party apps on the iPhone, an ecosystem of third party mobile VoIP app providers flourished.
IP platform providers like Digitalk are adding mobile VoIP clients that can be linked to prepaid card accounts. MVNOs have been able to sell voice over Wi-Fi without being “under the yoke” of carriers and their high prices, and apps from heavy hitters like AIM (with voice), Skype and Google Voice have flourished.
Some providers offer services along with apps that enable a screen keypad to dial out using a separate prepaid account. But other apps, like IPsmarx’ Breeze, lets users access VoIP calls from their existing cell phone keypads, using their in-phone contact list.
Mobile VoIP for Business?
We’ve seen great VoIP success in the enterprise with many companies implementing SIP-based PBX systems and softphones on every desktop. But consumerization of IT – or the demand by employees to bring in consumer mobile technology – is driving the need for mobile VoIP in the enterprise or small business.
Bringing mobile VoIP into the business setting can be done in a number of different ways. IPSmarx’ Breeze, for example, can be integrated into an enterprise PBX environment, so multiple mobile devices can connect to the VoIP service running through a centralized box.
Using another angle, Toktumi, a provider of VoIP services for small businesses, has a service called Line 2, which enables users to carry their work number over to their personal cell phones as a second line using VoIP services. With this service, users can have separately displayed caller ID for the two numbers and even two sets of voicemails for the two lines.
Mobile VoIP in the enterprise can be sold as a prepaid package, especially to small and medium-sized businesses. It can also be sold as part of a prepaid package with other IP-enabled collaboration tools, such as video chat and screen sharing.
At-Home VoIP: Inexpensive But Innovative
Home VoIP services have been a success for years now, but with new technology, free domestic, annual prepaid international plans and multiple lines are a newer reality.
VoIP may be most popularly used on prepaid calling cards where many users don’t even realize they’re depending on VoIP services. But selling VoIP as a direct-dial home service can require jacks that link traditional phones to internet routers or software-backed phones that look like traditional phones but link directly into the Internet.
However, newer technologies like Ooma and ObiTalk make VoIP plans even simpler pricewise, and they offer enhanced services as well.
With Ooma, users spend about $200 for a box that sits between their phone and the internet, and then their calls are routed out for free except for about $3.99 per month in taxes and tarriffs. Ooma also has an extension for Google Voice, which brings all of the combined applications of that system to a home phone or computer. Initially Ooma users were not mobile in their own homes since they had to be connected via Ethernet cable, but now Ooma has launched a wireless connection to the router.
Obihai’s ObiTalk works similarly and is less expensive at around $100 for a low-end device. The low-end box supports one phone line and doesn’t integrate into the traditional phone service, but does support Google Voice. A higher-end product supports an analog line for traditional phone service as well as one port for straight VoIP, which can include Google Voice or an Obi VoIP service. The next product up in the line has two phone ports and supports up to four VoIP services, including Google Voice and Obi’s VoIP talk service. Obi also has a tablet and smart phone application.
Ooma and ObiTalk are the first in what is expected to be many waves of tools that enable multiple VoIP and traditional lines on one home phone along with offer enhanced services, such voicemail, follow-me services and unification with mobile phone numbers and apps. All of these services are expected to be sold prepaid.
Triple Play? Pshaw! Welcome to the VoIP Bundle
Google Voice didn’t just disrupt the VoIP industry because it offered free voice; the service uses a forwarding application that enables users to combine all of their landline and mobile phone numbers into one Google number. Additionally, the service combines voice, video, SMS, chat, email, voicemail-to-text and more. There are still a number of challenges with Google Voice, including reports of poor quality and confusion in managing multiple accounts on a single device; nevertheless, the combination of apps sets the bar higher for every provider in the market.
“We are from the voice industry, but that is really such a small part of the whole picture,” said Singer. “We will end up supporting voice apps in addition to all this rich content.”
And it’s not just Google Voice pushing bundled IP-based services. Many users are accustomed to free video chat with Skype on their computers and mobile phones – and users have figured out how to use tools like Ooma or ObiTalk to combine Google Voice and Skype on one device. Even apps like Facetime and iMessage that come built into iPhones or the addition of voice to mobile AIM have changed user expectations. From here, Singer expects to see the rise of video-rich apps that go beyond basic conferencing and into gaming and other forms of collaboration like photo and screen sharing. Many expect that these services will be sold in a prepaid business model and will be linked to free domestic minutes.
Applying Phone Numbers to Social Networking Accounts
To really shake things up, German company Tyntec has figured out a way to link social network accounts – those on Facebook or Twitter for example – to mobile phone numbers. That means that users will be able to send texts or even place IP-based calls from these accounts. Tyntec’s tt.One service, which has already launched in Europe and was launched in North America in May, runs on a system of SMS centers and servers built within carrier networks (unlike Google Voice and Skype which have separate networks). Tyntec has worked to build partnerships with these carriers in order to build out the infrastructure.
“We basically assign a number to the Facebook account – this is not the same phone number you have on your phone, and you can call in or out,” said Thorston Trapp, CTO and co-founder of Tyntec. Because calls can terminate into the traditional phone system, there is no need for users on either side of the communication to be subscribers of the tt.One service. For now the service is free to users. Carriers earn money through termination fees and potentially a portion of other revenues, such as advertising that tt.One will sell to users.
Tyntec’s business model represents a trend of carriers opening up their networks to third-party application developers, said Ovum chief telecoms analyst Jan Dawson. In some cases, carriers will charge a fee to open up APIs for developers to begin innovating while in others they may partner with companies like Tyntec to integrate technology.
“It comes down to operators realizing that they are losing ground in terms of innovation,” said Dawson. “They realize that the next great business model is probably not going to come from within the operators, but it’s going to come from the Web world.”
As these new apps take shape, domestic voice minutes will be given away, while international minutes will be given away dirt cheap, but that won’t kill competition. The truly competitive service provider will be those that have the most innovative add-ons, enabling not just voice, but all kinds of collaboration across borders over IP networks. •