AT&T announced last week that it has "taken the steps necessary so that Apple can enable VoIP applications on iPhone to run on AT&T's wireless network." Before the company's decision, VoIP applications on iPhone were enabled only for Wi-Fi connectivity. Ralph de la Vega, president and CEO, AT&T Mobility & Consumer Markets, said in a statement: "[the] decision was made after evaluating our customers' expectations and use of the device compared to dozens of others we offer."
Our analysis: In allowing VoIP applications to run on the AT&T cellular voice network, AT&T has in some ways mitigated the public relations black eye it got when Apple prevented a Google Voice application on the AT&T iPhone. AT&T may also have stopped any subsequent FCC directives that may have intervened in the Apple and AT&T policies on network usage and applications development.
But AT&T has also opened the door to lose some voice revenues. For example, if an iPhone application allows a user to place an international destination that starts with a local AT&T connection but terminates in a distant country over the Internet through a VoIP gateway, then AT&T will have lost the international long-distance revenue for that call. However, in this example, AT&T still accrues billable local voice minutes.
If the same call used an AT&T data channel to connect, then AT&T would bill accrued data usage, although the user cost benefit may be questionable depending on what the user pays for data usage. However, if the user were to place the call using a Wi-Fi hotspot, then AT&T would not receive any revenues (unless AT&T owned the hot spot.) Furthermore, in both cases when a data network is used, the VoIP call quality will suffer given the best effort nature and variations on connection quality inherent in mobile data networks.
What remains to be seen is if 4G networks will improve the odds of better call quality when a VoIP call is made over mobile data networks. The prevalence of bigger wireline broadband pipes helped solve this issue as wireline VoIP moved from infancy to maturity, as did quality of service management techniques such as MPLS in the enterprise IP-VPN. But will 4G mobile data be a best effort service? Will 4G QOS and class of service even be allowed? In some ways, the FCC position on net neutrality may affect any real time application over mobile data channels, including voice and video. We'll come back to these questions after we hear back next time from some readers about their views on net neutrality.