Mobile VoIP: The New Wild West

Carl Weinschenk
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In the span of a few years, VoIP has moved from being an intriguing idea to the main way in which voice and media calls are made. It’s hardly a mature technology, but it is getting there.

Infonetics reports that the VoIP business model is going through what can be characterized as growing pains as it incorporates mobility. The firm, according to Telecompetitor, found that the number of over-the-top (OTT) subscribers grew by more than a factor of five last year and now stands at 640 million.

That’s the good news. The bad news is that the average annual revenue per user (RPU) is a paltry $7.13. The firm said that the providers are subsidizing that small number with advertising, third-party apps and creative relationships with traditional operators. The study found that the industry was optimistic about Voice over LTE (VoLTE), which is the next step in wireless voice.


VoIPReview, in a press release intended to create some attention, laid out five places where VoIP now can be used: Overseas; at the local park; sport stadiums; theme parks; and planes, trains and automobiles. That clearly isn’t an earth-shattering bit of news, but does suggest why the number of users is experiencing such a meteoric rise. VoIP now is mobilized, and can grow in tandem with the proliferation of devices and networks.

Two of the companies that will try to ride that wave – and address the RPU challenge -- were in the news last week. Mobile virtual network operator (MVNO) FreedomPop pulled in $5 million more in funding from existing investors. GigaOm reports that this is the second time FreedomPop has expanded its Series A round, which now stands at $5 million. The company didn’t say which of the existing investors contributed.

The other company in the news is Zula. It is backed by Jeff Pulver, one of the original VoIP champions as co-founder of Vonage. Writes TechCrunch:

Put simply, Zula, which is still in stealth, is one of that class of business products that is looking to capitalize on the surge of consumer apps that younger people, weaned on smartphones instead of rotary dials, have used for their first forays into virtual communications with others. Pulver wants Zula to follow them into the working world. No surprise then that they’ve privately been calling it the “WhatsApp for businesses.”

The bottom line is that a fiercely competitive world is emerging in mobile VoIP: new devices, ever stronger networks – and intense downward pressure on baseline subscription rates. Subscription rates, of course, always were the gift that kept on going for operators and service providers. The fact that they are essentially disappearing is good news for entrepreneurs with great ideas and, perhaps, even better news for consumers eager to use the products that those smart people create.



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