INTERVIEW: Alan Paton, research director for independent VoIP comparison website, tells about the increasingly crowded – and sometimes confusing – mobile VoIP market.

He also explains how social networking and Instant Messaging services such as Twitter have the potential to extend the appeal of mobile VoIP beyond simply offering cheap calls.

Q: Why did you think it was necessary to set up and how does the service address this need?

A: Though mobile phones have been popular for over 20 years – the penetration reached 100 per cent years ago and there are more mobile phones than people in the UK, many having two or more – the industry is far from mature.

In fact it is now entering a period of even greater changes than in the past.

With we are currently addressing one of these great changes and that is the availability of alternative mobile calling services, especially for international calls.

Alternative phone services are not new in themselves. They have been a big part of the fixed line business since telecoms liberalisation in the 1980s and have become even more important since local loop unbundling was introduced.

Ofcom (the UK regulator) statistics show for the UK there are at least 350 alternative fixed line calling services.

But alternative calling services for mobile are new and have sprung up only in the last two years.

The great enablers for this are:

  • the increasing computing power of mobile phones allowing them to run a wide range of add-on applications
  • their improving ability to access the web and services that the web makes possible

We see an opportunity here to explain the growing range of offerings without the confusing marketing hype and to help users to select what suits them best.

Solutions range from the very simple (you can use your existing mobile phone as it is) to those that require you to download and install an application (usually done in a few minutes).
Many services make use of dual-mode smartphones (they can use WiFi). Each solution has its pros and cons.

Q: What are the most confusing/misleading aspects facing consumers when contemplating mobile VoIP or mobile calling applications?

A: The new services use one or more of several basic technologies, call-back, call-through, local number substitution, VoIP and WiFi, and it is amazing how often you have to dig deep into a provider’s web site to know exactly what they are offering.

It is like a garage selling a car but making it difficult for the customer to know if its automatic or manual, diesel or petrol, or four door or five door.

One of the biggest confusions is over what constitutes true mobile VoIP.

We think it should be only those systems that implement the transformation to VoIP on the phone itself.

Many providers call it "mobile" VoIP if any part of the overall connection to the called person uses VoIP.

There is very little information on the current practicalities of using mobile VoIP; does your data service allow it, what quality will you get, what are the costs of using the data channel for VoIP, and the role of WiFi.

Q: Do consumers base their choice of which service to use solely on price or are other factors involved?

A: A desire for cheaper calls especially international calls is a big driving force but by no means the only one.

There is also at this early stage of market growth a lot of interest from the gadget minded who just love to get the latest electronic gizmo.

Another very big factor is the popularity of Instant Messaging, services like Twitter, and Social Networking.

Managing your contacts is a real headache and people want access to all their communications services, and this includes social networking, when they are on the move.

Many alternative calling providers offer aggregation services, that is access to all the IM communities or social networks that a user might belong to through one application interface on their mobile phone, and other services such as address book management.

Cheap calls may be just one, and not necessarily the most important, of a rich range of features and new mobile services.

Q: Do you see a move towards a particular type of service (Mobile VoIP, Call through, Call Back etc)? If so, what is driving this?

A: VoIP is the long term future for the whole mobile industry but there is plenty of scope for other technologies for many years, perhaps indefinitely.

Smartphones are having a big impact and from being a few per cent a couple of years ago are expected to be at least 30 per cent of the market by 2012.

The iPhone has given a big push to the market giving users for the first time a really good web experience on a mass market mobile phone.

The Skype WiFi mobile application for the iPhone achieved over 2 million downloads in 9 days of being launched. Incredible.

The user demand is there. And, by the way, Skype is certainly cheap but it is by no means the cheapest for mobile VoIP calls. (See here for a comparison)

Over the coming months we will see what Google with its Android operating system for smartphones and Nokia with its new product response to the iPhone, can deliver.

Q: Is the current economic situation likely to lead to a clear-out in the mobile VoIP industry?

A: No, of itself it won’t lead to a clear out, though I’m sure it will make conditions tougher for everyone.

Changes will happen, companies will fail, new ones will appear, services will evolve or be dropped and new ones appear, but who flourishes and who doesn’t, depends most on management skills and sound product concepts.

Q: What are the likely implications of potential legislation by regulators in the EU and US which could force mobile operators to allow mobile VoIP calls to be made on their networks?

A: Huge. Think of those Skype iPhone application downloads and that was just for mobile VoIP over WiFI.

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