To make money from mobile VoIP, companies have to accept certain realities

Jon Arnold has updated his very interesting portal website IP Convergence TV. This time I also wrote a guest opinion, because to make money from mobile VoIP companies have to accept certain realities: "WiFi isn't everywhere and callback costs double".

I love the mobile use of VoIP but I still find it quite uncomfortable. That's what I point out. Especially annoying is how Skype, Fring, Truphone and other SIP based VoIP services get blocked by German 3G providers. Sorry, Dean Bubley from Disruptive Analysys! The reality looks much darker for VoIPo3G than you predict for the future. (But thanks for your regular Google ads "3G mobile Voice over IP. Analyst report: is it a threat to carriers? Or a future opportunity?". I better put a direct link to your website.)

Mobile VoIP over Wifi works only at home or in the office where I don't need it. So in my guest opinion I advocate intelligent cell phone software which automatically completes calls as callback, callthrough, Vo3G or VoWifi while the user doesn't even notice. I have already installed an example software on a Nokia E61.

Maybe if more and more people use these options, Dean's dream will come true. If everyone uses only mobile callthrough, triggered by intelligent software on the handset, the mobile network operators cannot charge any other items than the tariff's included minutes for local calls. Their voice legacy cell phone networks would become dumb pipes into the internet, the way we already see it with the 3Skypephone or iSkoot, Ringfree, Mobivox, Jajah Direct, Sipbroker, Tpad, Rebtel, Mobiletalk, etc. If mobile operators wanted to charge for international calls at all, they would have to embrace VoIPo3G and could at least charge for data, the way Dean predicts it.

But until this comes true, the mobile VoIP companies should attack the incumbents with better callthrough options, to take more and more cell phone calls out of the traditional networks and into IP. Read the full text for further explanations!

3Skypephone doesn't do mobile VoIP

Many commentators didn't realize that the 3Skypephone doesn't really do mobile VoIP. Even my friends at Areamobile thought at first that a 3G data flatrate would be necessary to use it. It was quite easy to get this false impression as the press release only said:

29th October 2007 – Skype, the global Internet communications company and 3, the mobile operator, have launched a new affordable handset that lets you make free Skype to Skype calls and send free Skype instant messages from your mobile phone to other Skype users no matter where they are.

The 3 Skypephone is a fully-featured 3G Internet phone with Skype built-in. In addition to Skype calls the phone makes conventional calls and can be used to access 3’s broad range of other internet services.

3 customers using the 3 Skypephone will be able to make Skype calls and send instant messages on the move with the push of a button. This is the first time an operator has offered a mass market device which is tailor-made for free calling over the internet from a mobile. Now, all of Skype’s 246 million registered can be reached for free with the 3 Skypephone. ...

No more technical details were given. But the mobile Skype calls on the 3Skypephone are basically GSM phone calls, since it's the iSkoot service which is powering them. The day after the launch iSkoot could send out their own press release:

„CAMBRIDGE, MA – October 30, 2007 – iSkoot today announced that it has been selected by Skype to help power the 3 Skypephone – the first ever mass-market Skype-enabled mobile handset. ..."

This means that Skype calls from the 3Skypephone aren't 3G VoIP calls. They are GSM calls from the phone to the 3-iSkoot server, which then cannels them over the fixed line internet to Skype. The data connection is only used to show the presence of the Skype buddies.

The 3Skypephone doesnt really do any mobile VoIP, since it uses Skype only in the fixed line part of the call. The bad voice quality, that for instance Luca critizes, is not because of unreliable 3G coverage. Possible causes are the low sound quality of the GSM codecs or transcoding issues at a gateway level. Yet still iSkoot is a nifty solution to guarantee Skype coverage nearly everywhere.

That's also why their FAQ list says:

Q: Will it work on 2G, 2.5G& 3G networks?
A: Wherever you have coverage in the UK, Skype will work. If you can make a normal voice call, you will be able to make a Skype Call.

Now it's also obvious why the technology doesn't work outside of the 3 network: It relies on free on net calls from the 3Skypephone to the 3-iSkoot server. Luca said that "if you are roaming (in Italy in some places you are under Tim coverage and not 3) Skype calls don’t work".

The 3Skypephone is no new invention but just another marketing skin for iSkoot. Take that TIME magazine if you want to elect your next "Invention Of the Year". ;)