by Anthony Cox on December 13th, 2012
Only a couple of years ago mobile VoIP had the reputation of bad QoS, dropped calls and an altogether unsatisfactory user experience. Lots of smaller companies were trying to run before they could walk, damaging the reputation of mobile VoIP, as well as the reputation of the market leaders.
Things have changed. Fly-by-night companies have gone, quality has improved immeasurably and traditional telcos are beginning to join their rivals in offering mobile VoIP. In some markets, particularly in Asia, nearly all handsets are sold with mVoIP clients, and as LTE arrives the all-IP environment means that the nature of how voice is carried will change, with circuit switching ceding to the “over the top” mVoIP model.
All this is giving the mobile “internet-voice” market a second wind. Indeed, five years from now Juniper Research predicts that one in seven mobile users- that is over a billion subscribers- will be using mVoIP.
What a market.
What a market indeed. The trouble with mobile VoIP is that, as with Skype on the desktop, only a very small proportion pay for the service. Many subscribers sign up to an OTT service without ever planning to pay a cent for it, and some industry players do not have a short-term revenue model at all. This represents the most important challenge to mVoIP operators- how do you monetise the user base?
The answers are beginning to appear. First, you charge for calls which land on the PSTN (a la Skype). Second, you monetise your massive subscriber base through targeted advertising. Third, you white-label the best bits of your infrastructure so that rivals (perhaps including telcos) can offer mVoIP too. Finally, you offer premium services so that subscribers pay for the most advanced features while getting basic services for nothing.
These strategies are working for several mVoIP players. What it is perhaps even more surprising is that, despite similar challenges, mobile video calling market leaders are finally beginning to monetise the mobile video calling sector through advertising and premium services too.