11 May 2010 | Published by Ovum

Mobile operators must embrace VoIP in order to neutralize the threat posed by Skype and other internet call providers, according to Ovum.

The warning, contained in a new report* by the telecoms industry analyst, comes just days after Skype announced plans for an ambitious expansion with a range of new subscription services and promises of cheaper calls.

Ovum’s report states that attempting to block mobile VoIP is not a viable long-term strategy for mobile operators. Implemented well, VoIP can attract new users, reduce churn, or even encourage data plan uptake.

Steven Hartley, principal analyst at Ovum and report co-author, said: “Blocking VoIP is like trying to control the tides. Most mobile operators today have attempted different means of hindering the use of VoIP, or are cautiously monitoring usage.

“At best, they offer special VoIP tariffs to avoid regulator attention, but these are not viable for end users. However, these approaches merely garner negative publicity from vocal early adopters demanding access.”

Many mobile operators are still clinging desperately to high-margin traditional voice service revenues that are gradually being eroded.  However, Verizon Wireless’ recent announcement that it will offer Skype access to its mobile customers heralds a more positive approach to mobile VoIP that Ovum believes all players will ultimately have to adopt.

“Without outside pressure, operators would not concern themselves with VoIP until they had LTE networks”, added Mr Hartley.

“By this time, operators would be able to offer their own VoIP services at a cost far below today’s circuit-switched networks. However, in the real world, user demand, competitor strategies, and increasing regulator interest in the net neutrality debate are dictating the timeline.”

Ovum believes that ultimately, the competitive environment will shape when, where, and how mobile VoIP is adopted – and whether operators are able to dictate their own destiny.

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