TMCnews Featured Article

The demand for increased mobility continues to drive a number of key decisions throughout the global marketplace. Consumers are turning to solutions that make it easier to stay connected on the go, especially to the corporate network. For that reason, the demand for mobile VoIP is growing, enabling seamless connectivity in areas where network infrastructure has yet to extend capabilities.

Last December, Juniper Research (News - Alert) released its forecast concerning the growth of mobile VoIP, suggesting the market will hit more than 1 billion users by 2017. This trend certainly reflects a dramatic shift in the way voice traffic is carried, as well as access to supporting applications. But are we on track with this projection now that we’re on the downhill slide of 2013? Let’s take a look at more recent figures.

According to figures released by Infonetics (News - Alert) Research, the growth in mobile VoIP is much more rapid. The firm suggests that 1 billion mark is realistic, but the timing is not. In July, Infonetics Research projected that this milestone would actually occur in 2013, driven by the development of applications to support this expansion. While this is great news for consumers wanting access to greater capabilities, it also means the growth of a business model that is hard to sustain.

While mobile VoIP offers considerable benefits for the end user, the reality is that it drives very little revenue for the mobile operator. The average revenue per user is less than $8.00, forcing providers to turn to other means of generating dollars, including advertising, third-party apps and wholesale arrangements. Still, consumer demand reigns and the accessibility and flexibility afforded with this communication alternative are driving additional demand.

Juniper believes this growth is also due to the improvements in technology, increased competition and the move by major telcos to join the Over the Top (OTT) space. Given the low rate of return on investment, however, these telcos do have to get creative with their business models to monetize the services they offer. Putting those services in front of the consumer in a high demand situation is key to driving the necessary growth where profits are concerned.

By 2017, the industry is projected to become a $16 billion dollar business. What does this mean for the average user? As providers continue to look to this growing area of opportunity, partnerships with third-party developers are becoming more appealing, for both sides. This area of development is more likely to be where providers will find their opportunity for differentiation, determining their value in the market overall.

The challenge will always be that mobile VoIP users subscribe to such a service to avoid high fees and costly charges that come from traveling outside of the network or overseas. Building out additional areas of value that consumers are willing to pay for in a way that seems beneficial and different compared with traditional networks will certainly be a sweet spot.