We looked at the iPhone mobile VoIP app Viber in two earlier commentaries. In the first, we outlined the ease of use of the service and in the second we looked at the terms of the service and compared it with Skype. Talmon Marco from Viber has posted a response to our second commentary, promising more clarity and no misuse of personal information.
Our current question is what does Skype, Viber or any other mobile VoIP service mean for operators? They still have an iron grip on their networks and in some cases prohibit the use of VoIP applications. This is not expected to change any time soon. However, what will change, at least over the longer term, is the business model.
In the short term, they are taking a ‘wait and see’ approach. While Viber makes VoIP easier, it’s questionable whether this will grow to a large scale. Voice prices are falling; according to our own data the average price per minute at KPN Mobile in the Netherlands was 14.2 cents in Q3 2010, versus 15.3 cents a year earlier. This also gradually reduces the relative attractiveness of mobile VoIP. Furthermore, without a business model, these services may not be around for very long. Even Skype has been unable to build a big presence in the mobile world.
In the past revenues have come mainly from two sources: access (connectivity, line rental, right of use) and usage (voice minutes, MBs, call bundles, SMS), and in the data world these come together in the sale of data bundles. The operators’ role is especially crucial when it comes to connectivity. However, they can still lose ground here: while no figures come to hand, there must be a growing number of iPod touch users who don’t have a subscription and use Wi-Fi for access. This suggests it would be a good idea for operators to expand the Wi-Fi network further and offer subscribers free access.
The biggest changes are on usage, with the communications market becoming highly fragmented. We have moved far beyond just calls (fixed or mobile) and SMS. Chat/IM, e-mail, pinging, MMS, WhatsApp, Nimbuzz, fring, Facebook, Twitter – there are a wide range of choices. What’s bothersome for the operators is that most of these (excluding MMS) are ‘over the top’; there is no special subscription required, only broadband access. In short, market share on the broadly defined communications market is shrinking. At the same time, users still need a data bundle in order to use the apps. Operators have already started cautiously announcing the need to move to ‘tiered pricing’ (the user pays), giving them room to grow. In addition, the number of ‘connected devices’ is increasing quickly.
Whatever happens, free mobile VoIP is a risk to the business model. In an IP world of data packets, the voice minute is losing its raison d’etre. LTE, an all-IP standard, will further contribute to this trend, as will the unending reduction in mobile termination rates. In short, the technical possibilities and financial room exist for newcomers to make calling even cheaper.
The existing operators will fight to keep the call minute. Large bundles are already on the market, mainly in combination with highly subsidized smartphones. Still, over time the voice minute can disappear, and then voice traffic is just another of the many applications on a smartphone - or a tablet or a notebook or TV . . . . .
