When will VoIP really go mobile?

Network convergence is marching ever onwards. voice over internet protocol may soon become a part of life in the mobile world, as it is in the fixed. it's not a question of if, it's a question of when?

Currently, VoIP is one of the hottest topics in the telecommunications industry. VoIP is simply

At the core of the network, VoIP is already an established business as thousands of third party service providers over the world already offer cheap VoIP services whereby traffic is carried over PSTN at the access layer and over internet protocol at the core of the network. VoIP is also established in the enterprise environment, where it offers several advantages over dedicated fixed lines for voice, including greater intra-networking facilities and more efficient call handling.

Now the trend is to bring the VoIP model and economics into the traditionally closed and coveted fixed and mobile access networks. So far, in these environments, VoIP is seen as a disruptive technology that is increasingly threatening the revenues of fixed and mobile operators. Currently, the majority of VoIP users are using software based solutions over broadband access from the likes of Skype, Vonage, Jajah, Yahoo, Microsoft and Google. The number of players currently offering VoIP services through software solutions has grown dramatically over the last two years from just four or five players in 2004 to more than 30 players currently competing in both mobile and fixed environments.

Incumbent operators are threatened by these VoIP solutions that are carried over their own broadband network and substitute their voice services, directly cannibalising their revenues. The operator is in danger of becoming a fat data pipe where third-party service providers collect a large portion of existing revenues, and the operator collects just a flat fee for providing a data pipe to the home. Moreover, a number of hardware vendors have released VoIP telephone devices - based on soft solutions - that can be connected to the personal computer through a USB interface. Some of these IP phones can even be plugged directly into either a broadband modem or a traditional phone line to access the internet and VoIP via dial up mode without the need of a computer. These IP phones significantly enhance the user experience and minimise the complexity that users can experience if they use a VoIP software client in their PC. There are also DECT, wifi and Bluetooth cordless handsets now entering the market, allowing users to move about the home environment and enjoy VoIP services.

Fixed operators currently offering traditional voice services are unable to match the low prices that these players offer, since the maintenance of an ageing PSTN network requires large opex and new services can be hard to deploy over this network. On the other hand, VoIP service providers are not burdened by operational costs and can offer a cheap and reliable service over broadband networks.

However, fixed operators have come to realise that carrying voice traffic over an IP network can allow them to cut operational costs by deploying an intelligent single platform that supports and manages different existing and future generation services. These players are now progressively deploying VoIP services as they increasingly enjoy abundant bandwidth with broadband connections. Indeed, several fixed operators in a number of advanced markets - including many European countries, the USA, Canada, and several developed Asian countries - are now integrating VoIP services and offering their subscribers almost free national calls together with broadband services under the same double or triple play package.

Mobile operators may also be increasingly challenged by players offering VoIP services via mobile software solutions. There have been talk of inspection software that blocks VoIP traffic from software solutions such as Skype and Vonage, but operators are somewhat reluctant to categorically state what measures are in use - with the exception of T-Mobile in UK and Vodafone in Germany - which have reserved the right to block VoIP services such as Skype and Vonage from running on their mobile access networks.

However, the growth of mobile VoIP soft solutions is snowballing, as currently there are more than 15 companies who have developed downloadable VoIP software client solutions to enable mobile users to talk for free to other users using the same client. These companies also act as mobile virtual VoIP service providers offering relatively cheap call services to any mobile or fixed line.

Unlike in fixed-line enviroment, there are few challenges facing these players in the mobile arena. The VoIP soft solution provider strongly relies on internet openness. However, incumbent mobile operators continue to exercise an overwhelming control over mobile data services, denying access to content outside their walled gardens. Indeed, the mobile operator continues to lock access to any internet portal or server without a pre-established agreement with the portal owner. Therefore the soft solution providers cannot offer VoIP service over mobile networks without an agreement with the mobile operator. Skype for example has already signed deals with mobile operators Hutchison 3G and E-Plus to bundle its software with their 3G/3.5G data plans.

So far, the majority of mobile VoIP soft solution providers are targeting access via wifi connectivity, so users can enjoy VoIP services anywhere there is wifi coverage including homes, offices and public hotspots.

High performance of the mobile device hardware required to process VoIP packets is another challenge facing soft solutions. So far, only PDAs and Pocket PC phones can handle this functionality given the high processing performance, stronger battery capacity, larger display and more flexible user interface they provide. All these elements are necessary to take better advantage of the multimodal capabilities of these phones for offering quality mobile VoIP services. For these reasons, so far, the mobile VoIP client can be implemented only over advanced and open OS such as Symbian, Microsoft Windows Mobile or Linux. These constraints are currently limiting market opportunities of these solutions to high-end smartphones. The market for these devices will grow only slightly over the coming years from about 50 million devices currently in the market place to more than 120 million devices in 2011.

Another threat facing pure mobile operators may come from operators who have interests in both fixed and mobile telecommunications markets. These players are now building a global strategy to provide fixed-mobile converged services. These services will be enabled by dual mode handsets (cellular and wifi) and VoIP will be the main bearer when calls are initiated or handed to wifi access points. When the user is using cellular mode only, then voice is carried over cellular networks that might or might not handle VoIP traffic. Dual mode devices that support fixed-mobile converged services typically embed VoIP solutions in hardware. One of the main advantages of such solutions is their high efficiency and low power consumption, necessary requirements to carry VoIP over mobile handset devices. It appears, this is the preferred technology for supporting fixed-mobile converged devices.

At the cellular networks level, VoIP traffic is bandwidth hungry. Because of the high requirements needed to manage and transport VoIP traffic over cellular networks only mobile broadband technologies such as HSUPA, CDMA2000 EV-DOrA or WiMax have the ability to handle this traffic. Therefore wide-scale deployment of end-to-end VoIP service over mobile broadband networks are not expected before the takeoff of enabling networks such HSUPA and EV-DOrA, which is expected in late 2008 or 2009.