AT&T should embrace iPhone VoIP over 3G
When the App Store was announced and Steve Jobs was discussing the possibility of iPhone applications totally transforming the way we use Apple's devices, he was asked if it would support VoIP on the iPhone. In response, Apple confirmed that VoIP would be available in the App Store as long as it was running on Wi-Fi, but not AT&T's 3G network. The company claimed that any VoIP solution running on 3G would be in violation of its exclusivity deal with AT&T.
But now that Global IP Solutions has released VoIP software for the developer community, I think it's time we explore why AT&T doesn't want iPhone VoIP running on its network.
Now I know that the first response will be because the company will lose substantial revenue as people use VoIP instead of its own network, resulting in less usage and fewer overage charges, but I think that's a bit short-sighted.
First off, no one is telling AT&T to allow VoIP on all its devices, just the iPhone. Secondly, why can't AT&T get in on the sale of VoIP solutions and encourage people to buy them from the App Store as way to reduce overages?
It may sound radical, but it just might work.
One of the main concerns every cell phone owner has is whether or not they will be charged additional fees for spending too much time on the phone. But with the help of VoIP, they'll be able to reduce the number of minutes they use and in turn, save some cash each month. In the process, AT&T will lose revenue and probably feel the effect of VoIP in no time.
And while the initial shock of lost revenue could be jarring, we can't forget that the iPhone customers are just one segment of AT&T's revenue source and they certainly don't account for the majority of users. That said, iPhone users are most likely to add apps to their devices and are more likely to use a VoIP app than someone using a BlackBerry or Treo.
But who cares? AT&T will lose some revenue in the short-term, sure, but why wouldn't it create a VoIP application of its own and sell it on the App Store, dubbing it the "official VoIP application for the iPhone 3G?" That app may not make up for the lost revenue in overage charges, but it will effectively create a PR campaign that the company can exploit for months: AT&T is the only cell phone carrier that's willing to let you use a different voice communication solution on its own platform, and thus, save you money.
The long-term effect of allowing iPhone 3G users to use VoIP over 3G could have a major impact on AT&T's bottom line. Current users would tell others that after buying an iPhone, they too will be able to reduce their monthly payment to one offering less minutes and use VoIP instead. In the process, AT&T could advertise that simple fact and probably see an influx of customers that are looking to save some cash on cell plans and own an iPhone at the same time.
It may be a risky move, especially considering AT&T may not be the desired carrier for some people, but I think it's a risk worth taking. Let's face it -- not all iPhone users will use VoIP anyway and more often than not, it'll be easier for them to make calls with their phone than to use VoIP on the device, since 3G is hardly ubiquitous.
But for every risk, there's the possibility of enjoying a huge reward. AT&T could lead the pack in VoIP communications over a cell network and exploit its "desire to make customers happy" to steal more customers from competing carriers.
Cell phones are quickly reaching saturation and cell carriers will be forced to steal customers from now on instead of gaining those without plans. And as that happens, they will need to differentiate themselves and try to entice more people to their side. And what better way to do that than to use the iPhone 3G as a test market and offer customers the opportunity to come to AT&T and enjoy all the benefits of VoIP?
Sure, it's radical. But at this point, throwing some caution to the wind wouldn't be such a bad idea for AT&T. And let's not forget that no one has a gun to the executives' heads: they can always stop supporting VoIP whenever they feel like it if it puts too much of a strain on the company's bottom line.
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Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
- It would makes sense to allow VoIP on "unlimited plans"
- It would makes sense to allow VoIP for customers who are in areas that don't have good cell phone coverage.
- It may actually cause users to spend MORE time on the phone, which would set an expectation. These users wouldn't want to switch to outer carriers because the perceived value would be less, since they would have to pay for "all" the minutes.
There are SOOOO many reasons to allow VoIP! Great article Don!
And yeah, the market has reached saturation, and ATT needs to steal customers. And they have. Hence the point of the iPhone's exclusivity agreement. How many extra people will be magically enticed to switch just because of VOIP? A few thousand VOIP geeks probably.
- ATT spends less money because these calls dont clog up their network
- ATT instantly increases its coverage area to every broadband enabled household in the world
VoIP over 3G:
- Gain additional customers
- If you have unlimited minutes or data, it wouldn't matter if you use 3G DATA or Voice
- It doesn't "COST THEM" any more to allow this, you're already paying for 3G data.
- People will actually use MORE minutes because they will be used to talking so much using free VoIP, these supplemental VoIP minutes will add value to the customer and will be away to keep them on this carrier.
- The whole "well they would loose money on people not using their regular pay per minute plans" wont work forever - these "minute plans" WONT exist in the future.
Eventually, unlimited internet is going to be available everywhere. Right now they have the opportunity to grab as many consumers as they can with this feature. In the future, the Internet will be everywhere and this whole "minutes" thing will be a thing of the past. Thats right, "minute plans" will go away just like America Onlines "hourly" Internet is something high schoolers don't even know existed. How ridiculous would it be for you to pay "by-the-hour" for Internet access in this day in age? How about by-the-minute "toll-rates" for calling between different cities with a cell phone? A call from California to New York is a regular minute with most cell phone plans. VoIP over 3G and WiFi is totally doable if someone in top-level management can make it happen.
IF ATT wanted to attract more customers, they would release a VOIP app that works over WIFI. They would be able to expand coverage for their network over WIFI networks. ATT would not have to add more cell towers. Inside buildings where cell signals don't reach you would still be able to be in voice communication without worry about missing a call. That is something that the enterprise customer loves and will pay for. Redundancy. If ATT wants to attract more customers they could give away the app and not charge for call made over WIFI. The worst feeling is having a nice new IPhone and ZERO bars.
A voip app on the iPhone would then have such a mrginal impact on revenue that could be offset by an app priced under five dollars.
I'd buy it.
Good luck with that.
They have said "no VoIP over Edge".. nobody has ever said anything about 3g.
I'm about ready to rock the iPhone world with the iCall iPhone product.
- by sciamannikoo September 7, 2009 7:03 AM PDT
- Ok, great! You have this issue with ATT, but:
- Reply to this comment
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(14 Comments)1. There is only ATT in USA? Why other providers must be penalized because of stupid agreements with ONE single provider?
2. Why other countries that barely knows or doesn't know at all about ATT's existence, must be penalized because of that? If I use a WinMo device, I can makes VoIP calls over 3G with T-Mobile. With my iPhone, I can't, because Apple's agreement with an american company compeltely unrelated with my country.
The outcome is that many users jailbreak their phone: I still waiting, as I can survive without 3G VoIP calls, however, It's unbelievable that US must always rules the rest of the world.