Will Mobile VoIP Hurt Telecom Revenue

In a market where consumers are increasingly mobile, the demand for VoIP is changing the industry landscape. Consumers are no longer bound by minute plans or data ceilings and without a strategy to push out a new revenue model, the operator without mobile VoIP may be facing a bleak future.

At least this is the news for Bangalink, the second largest mobile phone operator in Bangladesh. The company recently reported a 13.8 percent revenue loss in the second quarter, pointing to mobile VoIP as the reason.

But in this case, it’s not the use of mobile VoIP that has hurt the operator. Instead, it is the regulators stepping in and deactivating VoIP customers.

According to the Dhaka Tribune, this is the first time VoIP has affected the operator’s revenues. Company leaders suggest that the deactivation of high value suspected VoIP customers will have a prolonged negative affect on the operator in 2013. Total deactivations for the third quarter hit 190,000, adding to the 1.06 million deactivated in the fourth quarter of 2012 and the first quarter of 2013.

In this instance, regulators are trying to protect the revenues of government-owned telecoms from mobile operators providing low cost alternatives to traditional mobile plans. When consumers take advantage of a hotspot to complete a call via VoIP, the operator can’t collect the associated revenue. Why? Mobile VoIP sends the voice transmission over the Internet instead of the mobile towers. Savvy customers can use mobile VoIP exclusively, especially when traveling abroad, to keep mobile costs low.

In the U.S., consumers are opting for VoIP over traditional landlines and even implementing mobile VoIP applications to control the cost of their mobile devices. When VoIP first threatened mobile revenues, operators fought back by blocking services like Skype from their networks. But demand among the consumer base has taken hold, forcing many to rethink their strategies.

This new approach to mobile revenues has generated a shift in the industry. Developers are quickly releasing applications to support VoIP on mobile devices, turning tablets into voice communication devices and threatening the once dominant revenue structure of the per minute billing. If mobile VoIP enjoys the same growth in the U.S. that it has seen in global markets, what does this mean for the likes of Verizon, Sprint and AT&T;?

We’re likely to see all three, as well as some of the smaller players, ramp up their game to embrace application development and rich content revenue opportunities. By anticipating trends and embracing new demands, operators will be able to identify new revenue opportunities. The key will be in their agility to ebb and flow within such a dynamic industry.

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