VoIP over 3G to Reach Mainstream Status?

One analyst report this week is raising eyebrows and buzz with a claim that there will be 250 million mobile VoIP users by 2012. Considering that the number of people now using a VoIP client on their cell phones is minimal at best, the claim has been met with pushback in the blogosphere.

But Dean Bubley of Disruptive Analysis says VoIP over 3G will indeed snowball, driven chiefly by ever-increasing network speeds, among other things. Bring-your-own-access VoIP operators (think Skype) will make up the initial wave, he predicts. A fractured set of VoIP players, including fring, Truphone, Yeigo and Skype, and softphone suppliers like FirstHand, are “piggybacking on the increasing trend towards faster 3G networks (HSPA, EVDO Rev A), flat-rate data tariffs and open smartphones,” he wrote this week. He said another market driving the softphone is the consumer using a 3G laptop card as an alternative to cable modem or DSL. And playing into all of this is the fact that deals like MySpace-Skype are making VoIP more viral. “Most broadband PC users won't even check the terms and conditions, they'll just download Skype, or whatever cool voice-enhanced Facebook add-on their friends have invited them to sign up for, and expect it to work,” he wrote. “While some operators frown on this (or try and block it), quite a few don't care, as long as they get an extra broadband subscription.”

The real volumes will be gained as operators embrace mobile VoIP, he said, which is the crux of consternation for many reading the report. While the client-based mobile VoIP trend may potentially disrupt carrier models in the short term, those carriers will eventually be forced to turn to VoIP to maximize their already-scarce spectrum and to achieve operational efficiency, he noted in the report. “The report demonstrates that it will be the operators themselves which will be mainly responsible for the push towards VoIP being carried over cellular networks,” Bubley writes. “Carriers will become increasingly attracted to VoIPo3G because it will enable them to fit more phone calls into their scarce spectrum allocations, reduce operating expenses by combining fixed and mobile core networks, and launch new services like push-to-talk and voice-integrated mash-ups.”

Bubley later elaborated in his blog, noting that 4G architectures are flat and all-IP, necessitating the use of VoIP for voice on those networks. “Unless mobile operators continue to run separate voice networks in parallel, they will inevitably transition to VoIP at some point,” he said. He added: “Secondly, from HSPA+ or EV-DO Rev A onwards, you can get more calls/Hz/cell with VoIP than circuit switched. LTE should be able to get 100-200 percent efficiency gains. Given that voice pricing is coming down, capping the spectrum being used for voice makes sense. I believe that operators will become increasingly spectrum-constrained, and any ways to extend the carrying capacity of their frequency allocations will have economic benefits in future.”

However, for now, many operators in North America continue to build out circuit-switched HSPA and EV-DO networks for voice, looking to 4G to support high-bandwidth data-only services. Sprint Nextel, for instance, sees its planned WiMAX network as a way to mobile the Internet in general, not as an offload network for voice subscribers.

Nonetheless, Bubley sticks by his forecast. “I think 2008 will see a lot of operators putting a toe in the water with VoIPo3G,” Bubley summarized. “At the same time, fring and friends will also continue to gain users, and at some point we'll see a big push from Skype (and perhaps Google or Microsoft or others). 2009 will be even more busy, as we get HSPA+ rollouts, and perhaps UMB.”

What do you think? E-mail New Telephony.

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