Is mobile VoIP killing an industry

The benefits surrounding Voice over IP are so well known that companies throughout the world continue to migrate to the platform where voice and data connections share the same network. Those benefits are easily extended to the mobile user as well, driving the demand for mobile VoIP. The challenge for the market is that this growing demand is eating into mobile operator revenues.

In fact, for years these operators blocked services like Skype to protect their main source of funding. As demand quickly outpaced their ability to hold on to the customer base, operators began to embrace application development opportunities with third parties to identify new ways to make money. For state-owned telecom operator MTNL, however, the opportunities either didn’t present themselves, or the cost was just too great.

According to an article in the Business Standard, the operator opted to turn off its Internet telephony services due to the growing use of Skype among its subscribers. Offering services in Delhi and Mumbai, the operator once offered VoIP to customers needing to make international calls. The service was similar to that of the old telephony network systems and therefore was easily accepted by many wireline customers. With the growing use of broadband, however, subscribers tended to prefer Skype and other services that allowed for video chat. There has also been a growing demand for applications like Viber that provides calls over the data line, separate from chatting. Plus, such applications are free, which appeals to more than just the typical mobile VoIP user.

Even among Skype users, when making calls to individuals outside of the network, rates are still much cheaper than standard VoIP charges, according to experts. The impact is certainly felt throughout the global market. According to a report on the site Total Tele, Skype continues to eat into revenue opportunities. Research firm, Mobile Squared recently completed research on behalf of Tyntec and found that Skype is costing these operators roughly $100 million per day. Of the reported 280 million active users on the Skype network, 2 billion minutes of VoIP traffic are generated every day.

For mobile operators, that means lost revenue. For those hoping to extend revenue opportunities through mobile VoIP, 43 percent consider Skype a major threat. This perception intensified when the service was purchased by Microsoft in 2011. This ongoing threat in the marketplace means that it’s time for mobile operators to get active if they hope to survive.

Consumers are going to continue to call the shots in this market and unless operators can answer with something viable for adoption, they will lose revenue, share and perhaps even their ability to operate.