Cheap cellphone to cellphone VoIP calls growing

VoIP solutions aimed at smartphone users means low-cost or free VoIP calls may start to threaten cellular providers

Over the last few years the cost of mobile communications has received a fair amount of attention, culminating in mobile call termination rate cuts this year – with further cuts planned for the next three years.
These interconnect rate cuts have resulted in some call rate reductions, but many industry experts have warned that lower interconnect rates will not necessarily translate into lower retail costs.
Competition is the greatest force to drive down prices and the entrance of 8ta into the local market has already resulted in lower call rates.

The biggest competitive forces may not come from the cellular providers themselves, but rather from new Voice-over-IP initiatives which are starting to penetrate the market.
Balancingact-Africa has recently reported that Internet Solutions is already offering its corporate customers a SIP client on their mobile phones that looks for the nearest Wi-Fi hot-spot to route traffic over the Wi-Fi network rather than the cellular network.

"So whether the individual is on the company premises with a hot-spot or near one while he or she is outside the company premises, then their phone will use the Wi-Fi hot-spot rather than the 3G mobile network. Since Internet Solutions controls 80% of the South African hot-spot business, it has made payment alliances with a wide range of the hot-spot providers it supplies,” Balancingact-Africa said.

“Now imagine individual consumers being able to have access to a similar SIP client service. Soon a larger and larger number of people would be able to make IP calls using Wi-Fi and the mobile operators would be left with 'the road.' OK, it won’t be as clear-cut as that but it could certainly provide a seismic shift in traffic. When you turn on your laptop in many African cities, there is a lengthy list of publicly available hot-spots,” said Balancingact-Africa.

Dave Meintjes, MD of Connection Telecom, explains that their PBX technology automatically checks whether a mobile phone with SIP capabilities is on a corporate network when a call to a cellphone is made.
If the call can be routed over the data network using VoIP technology – which is close to free of charge – it will be, completely bypassing the cellular providers’ network and hence generating no revenue for the cellular providers on either end.

With a growing number of mobile handsets shipping with SIP clients, and the ease with which a SIP client can be installed on smartphones, the use of VoIP technology is becoming easier to implement.

It is well known that smartphones with Wi-Fi and VoIP capabilities have been of some concern to the mobile providers which generate most of their revenue from cellular voice calls, but to date the use of VoIP over Wi-Fi in the cellphone arena has not been widespread.

It is however gaining momentum with companies like Connection Telecom and Internet Solutions pushing this technology, and VoIP via Wi-Fi may well become a strong competitive force in future which will mean lower prices to cellular users.

- My BroadBand