The implications of Skype's free software application for the iPhone and iPod touch

* Also, Sprint enhances its VoIP services

This week we'll wrap up our highlights from the recent industry conferences NCTA Cable Show, VoiceCon 2009, and CTIA. Today we'll cover announcements from Sprint's VoIP upgrades benefiting its wholesale cable customers and we'll discuss the implications of Skype's free software application for the iPhone and iPod touch.

In connection with The Cable Show sponsored by the NCTA, Sprint rolled out some new enhancements to its consumer VoIP services that let cable company customers’ home phone service interact with the TV, computer, and mobile phone. The enhanced services include Caller ID to the TV, Caller ID to the PC, and a new voicemail feature that sends alerts for the home voicemail to a customer’s mobile phone and e-mail. Sprint provides wholesale cable VoIP services to 14 cable companies and supports more than 4.5 million cable VoIP/digital phone subscribers, according to the company.

Our observations: AT&T, Embarq, Qwest and Verizon lost over 8 million consumer voice lines in 2008 while Cablevision, Charter, Comcast, Cox, Mediacom, and Time Warner Cable added over 4 million VoIP lines in 2008 - with the net difference attributed to cord-cutter’s wireless substitution of mobile phones for a wired home phone. The battle for wired voice lines continues and the more cable providers can do to offer advanced VoIP features, the better success they will have as they take away telco voice customers.

In other news, Skype released free software for the iPhone and iPod touch that enables free Skype-to-Skype calls over a Wi-Fi access point connected to the Internet along with (charged-for) outbound calls to landline or mobile phones. Skype customers can also receive calls from their personal online number. Other features include presence monitoring of Skype contacts who are online/available to IM or talk and the ability to communicate using Skype’s instant message service via 3G, Wi-Fi, GPRS or EDGE (whichever is available.) Skype also announced that the same features would soon be available with a free download supporting BlackBerry phones.

According to Emma Mohr-McClune Principal Analyst for Wireless Services Europe at Current Analysis "Skype is considerably more dangerous for European operators where consumers frequently make international calls, than the U.S., which is a single homogenous market and where Skype usage is lower. That’s why today, when 3G iPhone users in markets such as Denmark or Ireland attempt to place a VoIP call on the 3G iPhone Skype client, they receive a notification to the effect that Skype calls over 3G networks are currently not supported due to restrictions that may be placed on your data plan."

Our observations: Skype has fired a shot across the bow to mobile operators who have not yet considered mobile VoIP. We note that the traditional non-VoIP infrastructure may be more efficient for pure voice calls than a VoIP-over-data connection in the mobile environment, so mobile operators may not be inclined to embrace VoIP for voice calling. 

However, we are reminded of VoIP’s early days almost 10 years ago when international callers who tried PC-to-PC and PC-to-PSTN VoIP found their calls (or IP sessions) blocked by phone companies and ISPs that wanted to protect traditional voice service revenues. We think that rather than block Skype applications, mobile operators would be better off if they raced to offer competing mobile unified communications features at competitive rates so they can take on Skype directly.

Next time: Cisco announces upgrades its telepresence and unified communications portfolio at VoiceCon.

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