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VoIP Could "Seriously Reduce" Roaming Charges
[July 05, 2006]

VoIP Could "Seriously Reduce" Roaming Charges


TMCnet Contributing Editor
 

Mobile operators must "convert the threat WiFi (News - Alert) and VoIP poses to roaming revenues into an opportunity by incorporating the technologies into their strategies."

And let's have it wrapped up by, say, lunch.

This is one finding of the latest study, "Mobile roaming 2006-2011: Increasing usage and revenue to counter regulatory burdens," published by industry analyst firm Visiongain.

By "adding Wi-Fi capabilities to their offerings, mobile operators will be able to capture a growing market currently targeted at mobile roaming subscribers," the consultancy says.

Whozat? Visiongain is an "independent media company" based in London, whose business is to produce a whole lot of business-2-business conferences, newsletters, management reports and e-zines focusing on the Telecoms, Pharmaceutical and Defense sectors.





The group's study found that the threat of EU regulations will continue to drive roaming prices down in the EU, and extrapolates "this trend is likely to occur globally as operators seek to increase roaming usage as a boost to declining voice revenues." In other words, if you make it less expensive more people will use it.


I can buy that. Of course, roaming currently provides up to 17 percent of operator revenues, so if they lose that they could be in trouble. Frequent business travelers are by far and away the ones who use roaming the most, so if operators want to keep them happy they'll find a way to use VoIP to lower their costs.

Visiongain agrees, arguing that "price reductions by operators will succeed in driving usage, allowing operators to tap into the 95 percent of subscribers who currently do not use roaming services whilst abroad."

VoIP through WiFi will become "an increasingly attractive alternative to mobile voice calls whilst roaming due to the disparity in price," the consultancy reports, finding that a typical voice call whilst--isn't that a great word?--roaming over WiFi costs $0.02 per minute, compared with a typical cost of $1.25 per minute through mobile.

It's true that the increase in Wi-Fi hotspots worldwide is creating more opportunity for travelers to use VoIP services, which sensibly contributes to mobile roaming's declining revenues. In fact, several companies are already using the price difference between VoIP and mobile as a marketable advantage--RebTel specifically targets the high price of mobile roaming voice calls with its international calling options.

Visiongain's report throws in the observation that Nokia's (News - Alert) entry into the Wi-Fi market with its converged GSM / Wi-Fi handset, the 6136, is "significant," because it "legitimizes the technology's entry into the mobile handset market."

David Sims is contributing editor for TMCnet. For more articles please visit David Sims’ columnist page.


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