Analysts say that Mobile VoIP Market will boom around 2012 hitting more than $65B annual revenues. Many interpret this as a sign for investments in Mobile VoIP applications and services, thinking that consumer VoIP market will grow from nearly zero in 2008 to over 500M users in 2012. Every other day I read breaking news about VoIP Application for a new mobile device or platform.

I think they are all wrong. I don’t think that by 2012 Mobile VoIP market will even exist as a standalone market.

VoIP stands for Voice Over Internet Protocol – now which consumer really cares about what protocol is carrying his or her voice to the destination device? What the average consumer wants is a cheap and simple way to make calls, the protocol used is really least of the consumer concerns. Phone bill is though, but what does that have to do with Mobile VoIP? Would Internet Protocol make your phone bill shrink? I hardly think so. Phone companies need to make money so they can keep giving us a high quality service, keep their backbone, customer support, sales and other departments running requires money, and lots of it. Phone companies need to pay their employees, and these guys don’t really care if their dim comes from per minutes or per kilobyte cost. It’s not to say that I don’t think we’re over charged for making calls – we are – since most phone companies are just too greedy – but it has nothing to do with Internet Protocol per se.

So unless we switch back to direct trading economy phone companies will continue paying their employees and this money will come from us either directly (us paying phone bills), or indirectly (by someone subsidizing our calls for some sort of benefit). Mobile VoIP application providers may temporarily ‘enjoy’ lower operational costs and thus provide cheaper calling, but it’s neither convenient nor a steady service going beyond the techies community – it’s not a long term investment.

The reason I think Mobile VoIP market will never lift of, is that I don’t think it has independent existence from the mobile telephony industry. There are various providers (including JAJAH) providing all sort of mobile VoIP applications to make calls over data connection but those are not consumer ready for many reasons which I won’t count here. Mobile VoIP application can be consumer ready only if they are merged into the mobile device, either coming from the handset maker, mobile service providers or both. Hence it will never be an independent market. Mobile VoIP is a very misleading term.

What I do think will happen in the next few years is that Mobile Operators will gradually shift their core infrastructure to be NGN-like  and this is because audio is only one of the media types that will be pass over the air – it does not make sense to keep one infrastructure for voice and another for data – merging makes more sense. While this may potentially lower operational costs for mobile operators, it will not necessarily lower how much consumers pay – this has more to do with the core greediness of the operators than the core network architecture.

Best,

Amichay