Why is mobile VoIP so slow to take off?

Why is mobile VoIP so slow to take off?

By Ingrid Lunden

RIM's first handheld BlackBerry wireless e-mail device, launched in 1999, filled an important gap in the market for secure, enterprise-quality mobile web messaging. The BlackBerry spread like wildfire.

Even though investment in mobile enterprise is growing - an estimate from analysts Frost & Sullivan sees spending on mobile enterprise rising at a compound annual rate of 21.3 per cent between 2007 and 2013 - BlackBerry-type booms are not enjoyed by all new wireless applications for business markets.

Voice over internet protocol, or VoIP, has been gaining ground in the enterprise market, as legacy systems are gradually replaced by their IP-based offspring.

But the mobile incarnation of VoIP has struggled to get going, despite being promoted by a raft of start-ups with names such as Jangl, Jajah, Rebtel and Truphone, as well as bigger telecoms groups, and used over either mobile data networks, such as 3G, or Wi-Fi.

Given enterprise users' constant desire to reduce mobile costs, particularly roaming charges for voice, what has been the hold-up?

Some point the finger at mobile operators. "I don't think enterprise mobile VoIP is going anywhere at the moment," says Phil Sayer, a principal analyst at Forrester Research.

He points out that people currently buy mobile voice minutes on a bundled basis, paying a monthly fee, for example, for 200 or 400 minutes plus data. "The mobile operators aren't offering bundles for VoIP; they're positively trying to make it go away. So there is no immediate benefit for the business user or purchasing folks to adopt it."

Others say the phones themselves do not make the job of using mobile VoIP very easy. With operators often blocking services over their mobile networks, mobile VoIP services typically need smartphones with Wi-Fi connections and special downloaded software, or soft clients, to work.

But the soft client market in Europe is small. Frost & Sullivan puts it at about 180,000 users, although the analysts point out it is growing more than 50 per cent a year.

Although many of the mobile VoIP services today are marketed as "free" or at least very cheap, supporters of mobile VoIP point out that there other advantages beside cost - like its fixed-line version, putting VoIP on mobiles would make adding other kinds of voice-based services, such as conferencing, easier.

Shomik Banerjee, industry analyst for enterprise communications at Frost & Sullivan, says that interest in these extras has waxed and waned: "A few years back there was a big fuss about mobile conferencing, then it died down, and now there is some movement again. Most employees don't stay at their desks, so there is more need for conferencing capabilities in mobile phones."

There do, indeed, appear to be more of these services on the horizon: Truphone has announced it is linking up with free conference calling specialists, Iotum, to provide conference facilities.

Companies such as Truphone think mobile VoIP may end up following the well-trodden route of informal "prosumer" adoption first, and formal enterprise deployments later, much as Skype usage by business people led IT managers to rethink their VoIP and instant messaging offerings

"In the modern world, there is no distinction between the business and consumer user," says James Tagg, chief executive of Truphone. "Technologies move across the two seamlessly."

Mr Tagg says more than half of Truphone's subscribers, tens of thousands across 149 countries, use it for business.

Indeed there have been a few recent consumer-focused developments from leading technology brands that could go some way to making mobile VoIP more user-friendly for business users.

Apple recently announced the release of an iPhone software development kit that will facilitate more applications for enterprise users. Truphone has been one of the mobile VoIP operators to say it will make a client to use on the iPhone platform. (Steve Jobs, boss of Apple, says only VoIP applications that work over Wi-Fi rather than mobile operators' 3G networks will be supported.)

At the same time, Google is trickling its newly acquired unified phone-number service, Grand Central, into the market.

Some do not think mobile VoIP, at least in current product offerings, can be compared with the rapid growth of fixed VoIP.

Mr Sayer at Forrester says: "Skype spread through the consumer world because it was dead easy to use. [With mobile VoIP,] it will only be geeks who use Wi-Fi to make a call. Others don't want to play around with the technology.

"Some mobile operators still block VoIP traffic, but sooner or later the dam will burst because you can't defend that kind of position indefinitely."