Death of Telco?

It seems as though every month some thought leader on technology or the telecom industry will generate a piece about how it is the end of times for the old Public Switched Telephone Network (PSTN). The fact that VoIP has become a new standard for transmitting voice and beyond is regularly broadcast across the internet. It’s a well-known fact that both organizations and regular consumers can benefit from taking advantage of communications beyond a traditional phone bonded to an office desk.

At one time, the cordless telephone was a pinnacle of communication technology. This granted people mobility which enabled other tasks to be accomplished simultaneously while carrying out a conversation. For those with a poorly located phone connection and those with large homes or offices, the cordless phone had a measurable impact on the productivity of individuals.

I can remember when children would beg parents for their own line so they could privately gossip from the comfort of their rooms. Now, kids all want iPhones or some smartphone so they can chat with friends. As such a major demographic of the population, it is important to understand how the upcoming generation uses technology so the industry is prepared for the future. It does not necessarily mean a total change is right around the corner, though things we learn today will certainly be applied in the future.

Mobile VoIP to end all….. maybe

Recently, an article surfaced in InformationWeek about mobile VoIP and a perceived plan to completely conquer the telecommunications industry. Interestingly, the author chooses to use the acronym mVoIP which tends to occasionally surface in some publications. Essentially, this acronym, something we have mostly avoided using here at WhichVoIP, describes the many applications that are available for various mobile platforms.

These applications are all very similar, but range in effectiveness from features to other capabilities such as the ability to call any number, like a regular phone line. Some believe that these applications could very well mean the end to the fixed line network. However, even though it sounds possible, any immediate or drastic change is nearly fictional.

The fact that such applications work over 3G and 4G without using minutes is great, but not exactly convenient in some regards. In time, this could eventually kill off the majority of the fixed line market, but it is not likely to happen anytime soon. For users to make highly effective use, it would require using a multitude of different apps to stay connected.

mVoIP to end all. Probably not…

In some ways, these applications have far more uses than any fixed system. Yet, at the same time, there isn’t a viable “all-in-one” solution the industry needs. As with most services, you are  limited to free conversation with another user of the same application. It would take some massive movement of people all saying, “Let’s use only Skype to communicate,” and further, effectively resonate this message across the globe for this to actually work.

Another fact in the matter, every cell plan has minutes attached. Many times, these plans are often unlimited meaning there is no reason to call anyone in the country by using another application.

Consider the revenue from business as well. With the transition of regular phones to VoIP for office phones, these applications have virtually no help to a large corporate environment as no organization says, “Let’s all install Kik to message each other.” Though the masses seem to like these applications, the fixed line market – now transitioning for VoIP – is still growing at an enormous rate. After all, the most profit in telecommunications comes from business services.

What is mVoIP killing?

It seems as though mVoIP is not killing anything at the moment. What it is doing is teaching lessons about a select segment of the market. At least ten of the top mobile applications in either the Apple Store or Google Play are communication oriented. Granted, applications like Snapchat are not useful for business (expect maybe a clever marketing maneuver.) It does show people want to be connected but only a small demographic, that is a user group that is mostly younger than 25.

There is another lesson in the rise of the mobile VoIP application. Most don’t want to pay for anything that their mobile service provider already includes in their monthly plan. Another aspect is the discretion of some of these applications but that’s a subject for another story.

Essentially, real VoIP applications are the ones that matter and that actually produce income. Even Skype, which appeals to a regular consumer, offers international calling, connectivity to “regular” phone lines and multiple platform support (i.e. OSX and Windows.) Other similar applications like Vonage or even magicJack are more of a testament to the whole spectrum of VoIP than merely the mVoIP market of unimpressive VoIP apps.

The market knows

You don’t think major telecom providers and ISPs haven’t noticed these applications? Well they have! For many years now, apps like Skype have been hated by ISPs and other competitors. In business, you know to keep a close watch on competitors.

When the time comes, it wouldn’t be surprising to see large mobile providers and fixed line ISPs all creating applications to compete with this market. Then again, it may never become necessary. The growth of both Skype and LINE have leveled in recent years. A shocker at first, but it seems that large providers are more accepting of these applications’ places in the market.

Yes, mVoIP applications are all the rage. They are a testament to power of modern network infrastructures. It is important to watch the market while keeping an eye out for innovation within these services. However, unless you are teenager, it isn’t truly important to download and experience every service. Though they gain a viral like attention, the impact on the market is not enough to completely kill Telco.

For more information on mVoIP consult our Mobile VoIP section.

About the author  ⁄ Dan

A veteran of the dotcom boom, Dan has worked with leading tech companies and startups, and is the author of several books and articles. Dan has been contributing to for several years.

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