Why VoIP will not kill the mobile star

Posted on October 4, 2005 
Filed Under Uncategorized

From a critique of an Economist article:

VoIP is a natural threat to the voice business of fixed operators. They are already severely under threat by new discount service providers in the long distance and international call business; the entries of cable TV operators into the voice telecoms business; and the migration of younger customers away from any fixed wireline phone connection whatsoever. VoIP will be the final nail to their coffins.

“Pure” mobile operators are actually the most insulated from cannibalization of VoIP. We have had 100% ability to use VoIP on mobile phones since 1998 when the first Nokia Communicator was released, and no such threat has materialized. For the very reason I explained above: that any “free” VoIP service on a mobile phone will still incure usage charges on the “data” side that totally wipe out any possible “savings” gains from the VoIP calls. Look at your own “internet” service on your mobile phone or laptop modem card – you are charged per megabyte or by minute, or if not, you have a monthly limit of how much “fair usage” you can have per month. There is no such thing as free internet on the mobile network. There is a natural resource scarcity that guarantees this.

(via Sumedh Mungee)

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One Response to “Why VoIP will not kill the mobile star”

  1. Charles F. Moreira (unplugged) on December 1st, 2005 11:54 pm

    Well yes and no.

    If you have a flat monthly data package, like from Maxis, DiGi or Celcom, then the rather pricey pay-per-use GPRS, EDGE, 3G data charges aren’t an issue.

    I am subscribed to DiGi’s RM99 per month unlimited data package and surf the Internet from several PCs in my house through a two timeslot EDGE phone — ie a Nokia 6820 — and get about 100 kilibits/sec and my monthly data volume transacted is close to half a gigabyte which I’d have to mortgage my house to settle if I didn’t have the package.

    At 1 sen per kilobyte or 10 sen per 10 kilobyte I’m paying RM10 per megabyte or RM50,000 for half a gigabyte.

    However, I recall DiGi caps pay-per-use charges at RM199 each month.

    One of my young colleagues, who rents a room, downloaded 150 megabytes to his PC via his Nokia 6230i EDGE phone over Maxis’ network within a few days and that alone would have cost him RM1,500 but Maxis was gracious enough to retroactively include those charges into an RM120 unlimited monthly package he immediately subscribed for.

    So a student or young adult renting a room and wants to surf the Internet from his or her PC but the landlord won’t allow him/her to use his/her telephone line (why should he/she anyway) which means the tenant also can’t get ADSL (since he/she would have no phone line), then mobile is the way to go.

    Now if I got myself a four timeslot EDGE phone like the Nokia 6230, 6230i, 9500 or 9300, I’d get closer to 200 Kbps based on experience or 236.8 kilobits per second theoretical maximum, based on 59.2 kilobits per sec per timeslot.

    The figure of 386 kilobits per sec for EDGE is based on an eight timelsot phone with the original 48 kilobits per sec per timeslot.

    At 59.2 kilobits per sec per timelot today, you theoretically could get 473.6 kilobits per second with an eight timeslot EDGE phone, but as far as I know, nobody makes eight timeslot EDGE phones, so for faster speeds get a 3G phone.

    I’ve also found that Bluetooth is the most easily configured connection between the phone and PC once you go through the initial pairing process between the PC and phone and then configure the the phone to allow the PC to pair automatically with it.

    I use a Bluetooth USB dongle and find Billionton and Belkin to be great.

    Once you’ve gone through the lengthy Bluetooth drivera nd software installation, rebooted your PC and paired with your phone, setting it up as a modem, etc is a breeze.

    I can boot up Windows XP on the PC with the Belkin dongle installed and it works, though there are some problems with communication if I boot up my other PC also running XP with the Billionton dongle inserted, so I insert it after the PC has booted up and voila, I just dial and it connects seamlessly even with the phone in the next room.

    However, so far the phone won’t work with two PC’s simultaneously. I have to disconnect one PC before connecting the other.

    I used to use a Nokia CA-42 cable between the PC’s USB port and the Nokia 6820.

    First I had to download the appropriate modem drivers for the phone from Nokia’s website and save them to hard disk.

    Before I could used the CA-42 cable, I had to install the cable driver which was no hassle really.

    Boot up and connect the phone, Windows reports it detected the phone and installs the drivers.

    Then I have to manually add a modem through Control Panel and direct Windows to the location of the appropriate 6820 modem driver and install.

    Then create a dialup networking dialer with the number *99***1# and for DiGi, user ID “digi” and password “digi” without the quotation marks of course.

    Then I used this dialup connection just like any fixed line dialup connection and include it into my Outlook Express,. Outlook and Web browser connection settings

    Dialup method varies between phones. For example, Siemens and Samsung phones use a software dialer which comes with its phone software suite and while Nokia generally provides a software CD with most of its phones, other makers don’t include the CD with most of their phones and you’ll have to download the software from the manufacturer’s website and its file size can be about 30MB.

    Also, rather interestingly, the 6820’s battery held up much longer with Bluetooth than with the cable.

    However, some phones like the Nokia 9500, Sony-Ericsson 910i and Microsoft smartphones come with a cable, software and drivers on CD which makes setting it up and configuring them a heck of a lot easier.

    OK! I don’t get the “blazing” speeds of WiFi with EDGE and yes, I can’t go carrying my desktop PC into one of those mass production style, franchised chain cafe’s with WiFi access, or to Ming Tien Food Court in Taman Megah to surf for free while eating wantan mee.

    However, if I had a notebook, I could be surfing from anywhere over GPRS, EDGE or 3G.

    In January I took a Nokia 9500 review unit with me to Penang, Ipoh and Singapore and accessed the Internet and my e-mail from my car, taxi, train, bus, toilet, hotel room, etc and quite frankly I was impressed at the GPRS roaming over Singapore’s three networks.

    Un-beknown to me, DiGi was still in the middle of a three-month GPRS roaming trial period before the telcos were allowed to charge, so I was surfing for free over GPRS in the Lion City.

    Emailing from my Sony-Ericsson 910i during a recent trip to Beijing was rather more expensive, since they charged for GPRS roaming, though it was partly my fault for sending so many attached pictures as attachments.

    The 910i smartphone and my Siemens CX65 candy bar are both on Maxis postpaid accounts and both have POP3 e-mail clients.

    While I haven’t subscribed for Maxis’ RM120 per month unlimited access for either account, my monthly pay-per-use data charges at most came up to about RM55 for domestic use in one particularly extravagant month.

    At most I’ll probably apply for Maxis’ RM25 for 5MB per month package but that depends on my usage habits.

    The trick is to configure the phone’s e-mail client to download headers only or for IMAP (Internet Message Access Protocol) e-mail for your ISP allows it and discipline yourself not to e-mail bulky ringtones and pictures.

    Both the “headers only” or IMAP options will only download message headers to your phone and allwo you to selectively download important messages you want in full.

    Yesterday, I received a letter from Maxis with a colour separation of a SE 910i inviting me to subscribe to Blackberry Connect where I can install an application providing my phone with Blackberry functionality free.

    Then I have to subscribe for Blackberry push e-mail service at RM55 per month which is already more than my monthly pay-per-use GPRS charges.

    Then I’ll have to pay GPRS charges on top of that.

    C’mon Maxis, throw in at least 55 free megabytes per month with Blackberry service or I’ll have no compelling reason to switch from e-e-mel tarik (pull e-mail).

    Now that beach hotel in Penang was selling prepaid WiFi cards costing RM16 an hour (cumulative) and it only had WiFi coverage in the lobby.

    So while my cousin’s husband was lamenting not being able to trade stocks in New York on his notebook PC, I was happily surfing Antiwar.Com on the 9500 in my room.

    Now if I had a notebook PC, I’d be free, free, free to surf from anywhere at anytime, like I did with that 9500, while also discovering the blank spots along the railway line where Datuk Seri Dr. Lim Keng Yaik needs to armtwist the telcos to provide coverage.

    Meanwhile, I wrote the e-mail messages between stations and sent them when the train passes through a town.

    Now that’s the kind of freedom mobile communications provides and I can have it without getting high on coffee.

    There’s no free lunch you know.

    Free as in WiFi but not free as in coffee but with mobile communications, I can have beer while surfing from a pub, or wantan mee and kopi o while surfing in a coffee shop in Slim River or Triang.

    That’s mobile communications and with 17.2% fixed line penetration, now versus over 19% in 2000, coupled with sluggish wired and wireless broadband rollout in some places and lack of uptake in others, the way forward is mobile communications.

    WiFi, or as my German friend Max says “WeeFee,” and broadband are big in North America which has over 90% fixed line penetration.

    But with 17.2% and falling????

    Meanwhile, I leave you with a little snippet of information for your perusal:-

    While there may be a correlation between broadband and fixed line penetration in both advanced and developing countries, the issue of broadband penetration in the United States was the subject of a recent controversy over its definition and coverage.

    Free Press, a US-based non-profit organisation committed to media policy reform challenged conclusions drawn from the United States Federal Communications Commission’s (FCC’s) July 7, 2005 report by FCC chairman, Kevin Martin in his editorial in the Wall Street Journal as “either wildly optimistic or intentionally misleading.”

    Martin reportedly wrote that the United States “leads the world in total number of broadband connections” and “broadband platforms are engaged in fierce competition,” which Free Press disputes.

    See http://www.freepress.net/docs/broadband_report.pdf#search=‘united%20states%20broadband%20penetration’
    The FCC defined high speed lines as having speeds of at least 200Kbps in one direction, that the number of high speed fixed or wireless broadband subscribers increased by 17% in the second half 2004 over the first half to a total of 37.9 million on Dec 31 last year.

    It also gave the impression that the United States has the widest high-speed coverage in the world, with broadband reaching into areas within 95% of its zip (postal) codes by regarding the whole area under a postal code covered by broadband even if it had only one subscriber.

    “Our analysis indicates that 99% of the country’s population lives in the 95% of zip codes where a provider reports having at least one high-speed service subscriber,” said Page 7 of the report.

    See, http://www.fcc.gov/Bureaus/Common_Carrier/Reports/FCC-State_Link/IAD/hspd0705.pdf
    Free Press cited the International Telecommunication Union report that on January 1, 2005 the United States came 16th worldwide with 11.4% broadband penetration per inhabitant, trailing 15 other countries including Canada, leading European and Asian countries including Singapore, with South Korea which topping the list with 24.9% penetration.

    See http://www.itu.int/osg/spu/newslog/ITUs+New+Broadband+Statistics+For+1+January+2005.aspx
    It also cited the Organisation of Economic Corporation and Development which ranked the United States 12th among member nations in percentage of broadband subscribers per capita as of Dec 2004, with South Korea topping the list.

    See http://www.oecd.org/document/60/0,2340,en_2649_34225_2496764_1_1_1_1,00.html
    However, Malaysia wasn’t mentioned in the above reports.

    Back to the issue of voice-over-IP (VoIP), my cousin runs a small business in USJ 21 and he often calls outstation or overseas using prepaid IDD calling cards to cut costs.

    He reads of all these direct dial VoIP offerings where he can just pick up the phone and dial directly, so I make some enquiries on his behalf and when I tell him he will first have to get a broadband line before making VoiP calls, he decided to stick with IDD calling cards and mobile phone for voice communications, 56Kbps dialup, fax and SMS for data communications.

    Cheers

    Charles

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