What Price VoIP Over Wireless?

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I’ve been carefully watching the emerging pricing patterns for wireless broadband when used to carry VoIP, particularly as more and more such applications trickle onto the market. The issue really boils down to whether VoIP is considered a data service, i.e. an application, whose data stream is billed just as any other data use of broadband. That’s the current rule in the U.S., mandated by the FCC, but not necessarily one that will last forever, and also not the rule everywhere in the world.

In the U.S. we’ve now seen both Verizon and AT&T recast their subscription rates to reflect the expectation that eventually VoIP over wireless will supplant traditional voice telephony technology. My best bet is that the initial rate changes we’ve seen won’t be the last, as VoIP over wireless emerges into the mainstream and the carriers gain some experience with real life usage.

Indeed, as LTE (Long Term Evolution) matures, I’m even expecting that wireless technology to supplant landline-based DSL and DOCSIS as the last-mile delivery technology for much of the broadband in the world. In other words, even a business or home VoIP system will actually be using the same wireless technology as mobile phones. Indeed LTE has the potential to deliver in excess of 100 Mb/s broadband, and that’s just the start, with yet another generation of wireless broadband beyond LTE already in the process of being crafted. It’s also a heck of a lot cheaper to run a fiber to an LTE micro-cell that serves a small business or residential area than it is to have to pull fiber, copper, or coaxial cable to each and every location that wants broadband.

For end users of services such as Phone.com, the transition from wired to wireless delivery of broadband will probably be transparent, involving nothing other than changing out the current DSL or DOCSIS modem for an LTE modem (and perhaps plastering over the obsoleted phone jacks in the wall). Users would then simply plug their ATA or VoIP phone into the new modem, and continue with business as usual.

Outside of the U.S., carriers around the world are also struggling to figure out how to price the emerging service. The latest move comes from Telia, which had raised subscribers’ hackles back in March when it said it was going to put a surcharge on VoIP traffic for its wireless broadband users. Now, Telia has backed down from that position, but not without exacting a pound of flesh from consumers. Instead of charging extra for VoIP over wireless, it’s simply doubled its maximum charge for wireless data, from 9 SEK (US$1.40) to 19 SEK (US2.90). To be fair, it has quadrupled the amount of data that maximum pays for, from 0,5 MB to 2 MB.

Put another way, it looks like Telia is expecting to soon see a flood of movement from traditional wireless, and landline, telephony to wireless-based VoIP.


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