Mobile VoIP

Mobile VoIP

Mobile VoIP is often perceived as a threat to mobile network operators, eating into their voice revenues and reducing them to mere “dumb pipes”. It has also been perceived as “the next big thing” for a while now in the mobile market. This report will look at the myths and realities of mobile VoIP, the potential and threats of managed VoIP, and draw mobile VoIP penetration forecasts.
Key questions
Is there potential to turn managed VoIP into increased data revenue?
• Why does Skype dominate the independent “cheap calls” VoIP market and how do the other players compete?
• Does Google, the latest big name to enter the mobile VoIP fray, have the potential to disrupt the market?
• How are mobile operators reacting: fighting or cooperating?
• How and when will operators start to offer managed mobile VoIP?
• What are the key factors for enabling mobile VoIP to take off? •
What will mobile VoIP user penetration levels be up to 2014?

Table of contents
1. Executive summary . 6
1.1. International calls are the only real advantage . 7
1.2. Summary of strategies of independent players 7
1.3. Google Voice is a potential game changer ……… 8
1.4. The general trend of leaders versus challengers …………….. 9
1.5. The key factors effecting mobile VoIP take-off . 10
1.6. IDATE forecasts ………… 10
2. Mobile VoIP description ……. 12
2.1. Market overview ………… 12
2.2. Technology description . 13
3. Technical enablers for mobile VoIP …… 16
3.1. User experience ………… 16
3.1.1. Usability … 16
3.1.2. Availability 16
3.1.3. QoS ………. 17
3.2. Networks ….. 18
3.2.1. WiFi coverage will remain spotty .. 18
3.2.2. 2G networks are not suited for Mobile VoIP … 18
3.2.3. 3G networks: capacity trade-off …. 18
3.2.4. LTE networks: multiple options for voice …….. 19
3.3. Handsets ….. 21
3.3.1. 3G handsets …………… 21
3.3.2. WiFi compliant phones 22
4. The myths and realities of mobile VoIP pricing ….. 23
4.1. Mobile VoIP not very mobile – often limited to WiFi only …. 23
4.2. Free calls do not come cheap ……… 23
4.3. International calls are very attractive, whether WiFi or not . 25
4.4. National calls are competitive at best …………… 28
4.5. In conclusion; international calls are the only real advantage ………….. 31
5. Strategies of independent (over-the-top) players .. 32
5.1. The end of the simple no-frills era .. 32
5.1.1. Skype has won the winner-takes-all battle …… 32
5.1.2. The battle for pre-installation on mobile phones …………… 33
5.2. Looking beyond just VoIP calling …. 34
5.2.1. Truphone going global 34
5.2.2. Fring getting social …… 35
5.2.3. Jajah working behind the scenes .. 37
5.3. Summary of independent player strategies …… 38

6. Strategies of Internet giants 39
6.1. Google Voice: an alternative approach to the independent mobile VoIP players .. 39
6.1.1. What is Google Voice? …………….. 39
6.1.2. The strategy of Google Voice ……. 40
6.2. Google Voice is a potential game changer ……. 41
7. Strategies of mobile network operators …………….. 43
7.1. Germany: operator split strategies .. 43
7.2. H3G: full support of mobile VoIP …. 44
7.3. The general trend of leaders versus challengers …………… 45
8. Mobile operators can, and will, manage VoIP …….. 47
8.1. Lessons learned from fixed VoIP …. 47
8.1.1. Carrier-managed VoIP can be a success ……. 47
8.1.2. … even fending off the independent players .. 48
8.2. A means to increase mobile data revenue ……. 49
8.2.1. Transferring the fixed VoIP success to mobile 49
8.2.2. The potential to increase data revenue ………. 49
8.2.3. No enforced regulation, but pressure increasing ………….. 50
9. Scenarios and forecasts ……. 51
9.1. The key factors effecting mobile VoIP take-off . 51
9.2. Mobile VoIP user forecasts …………. 53
9.2.1. France: slow take-off but rapid uptake ………… 53
9.2.2. Germany: steady progress ………… 53
9.2.3. UK: aggressive strategies driving the market . 53
9.2.4. US: resistance from MNOs starting to ease …. 54
9.2.5. Forecasts ………. 54

Tables & Figures
Table 1: Table of data plans for the MNOs of France, Germany, UK and US …………. 24
Table 2: Examples of mobile VoIP offers …………… 25
Table 3: Table of international call tariffs for the MNOs of the US …………. 26
Table 4: Unlimited voice call tariffs for MNOs in France, Germany, UK and US ……… 28
Table 5: Examples of mobile VoIP packages ……… 40
Table 6: Free VoIP tariffs .. 48

Figure 1: The three key factors for managed VoIP success ……. 6
Figure 2: Comparison of price competitiveness between mobile VoIP and MNO plans . 7
Figure 3: Summary of the strategies of Skype, Truphone, fring and Jajah … 7
Figure 4: Skype versus Google Voice ….. 8
Figure 5: German and UK MNO positioning on mobile VoIP service ………… 9
Figure 6: Key factors affecting mobile VoIP take-off in France, Germany, UK and US . 10
Figure 7: Mobile VoIP users as a percentage of total mobile subscribers .. 10
Figure 8: Mobile VoIP user forecast: France, Germany, UK and US ………. 11
Figure 9: World mobile data and voice revenues, 2009 ………… 12
Figure 10: Breakdown of mouth-to-ear delay ………… 17
Figure 11: CS fallback architecture ……… 19
Figure 12: VoLGA: Voice over LTE via Generic Access …………. 20
Figure 13: GSM / 3G / LTE-enabled handsets (% of installed phones in Western Europe) ………….. 21
Figure 14: WiFi compliant phones sales . 22
Figure 15: Data ARPU depending on device ………… 24
Figure 16: International call charges by Vodafone UK ……………. 27
Figure 17: Mobile VoIP calling offer using the mobile Internet, by fring …….. 30
Figure 18: Comparison of price competitiveness between mobile VoIP and MNO plans …………….. 31
Figure 19: SWOT analysis of Skype ……. 34
Figure 20: SWOT analysis of Truphone .. 35
Figure 21: The fring network structure …. 36
Figure 22: SWOT analysis of fring ………. 36
Figure 23: Yahoo! Voice service in collaboration with Jajah ……. 37
Figure 24: SWOT analysis of Jajah ……… 38
Figure 25: Summary of the strategies of Skype, Truphone, fring and Jajah . 38
Figure 26: Google Voice service offering 39
Figure 27: SWOT analysis of Google Voice ………….. 41
Figure 28: Skype versus Google Voice … 42
Figure 29: The Skype package on the 3 network …… 44
Figure 30: Trends in mobile market shares in the UK, 2004-2008 ……………. 45
Figure 31: German and UK MNO positioning on mobile VoIP service ………. 46
Figure 32: Areas included in the Freebox plan ………. 48
Figure 33: French fixed VoIP subscriber numbers, December 2008 ………… 49
Figure 34: The three key factors for managed VoIP success ….. 50
Figure 35: Key factors affecting mobile VoIP take-off in France, Germany, UK and US . 52
Figure 36: Mobile VoIP users as a percentage of total mobile subscribers .. 54
Figure 37: Mobile VoIP user forecast: France, Germany, UK and US (million users) ….. 55