Race to Provide Low Cost International Calling on Mobile Heats Up

skype_logoYesterday I wrote a post for GigaOm, Skype: Coming to a Cell Phone Near You, discussing how the announcement of two new beta versions of Skype on mobile devices gave a hint of Skype’s future mobile strategy.

truphonelogo200px1At the same time Truphone announced a new version of their iPhone application. Whereas the version released at the time of the Apple App Store launch back in July only supported outbound calling over WiFi access points, the new release not only supports inbound calling to your iPhone number but also makes outbound calls via the 3G carrier networks that offer the iPhone.

Innovation driven competition in delivering low cost international calling services appears to be heating up during these challenging economic times – at least for calls originating in your “home” calling country or area code(s). Here’s a brief summary of what is evolving:

We’ve seen the evolution of two architectures for making VoIP-enabled calling from mobile devices; it’s all a matter of where the calling party’s Skype (or VoIP client) session is opened up – directly on the device or on a dedicated hosted server. This leads to two other considerations:

  • Carrying the voice portion of the call from the mobile device into the network cloud: either via the carrier’s robust and proven (GSM) voice channel or over via a WiFi access point
  • The need to support Skype’s instant messaging (chat and presence); this always occurs as a data activity

VoIP Client on the Mobile Device; VoIP over WiFi

Skype for Windows Mobile places the VoIP client directly onto the device. As a result the device must handle the “VoIP processing” to generate the packets that are transmitted over the supporting data network (either a carrier’s 3G network or via a WiFi access point.) As mentioned previously, it places heavy demands on the device’s resources, especially the processor (running at much lower speeds than on a PC) and the battery.

Truphone’s original voice offering also runs on the device (usually a Nokia Smartphone). While both Skype for Windows Mobile and Truphone can run over either WiFi access points or a 3G network, it is strongly advised to use these only over WiFi access points to have a reliable, robust, high quality voice service. For instance, the Skype for Windows Mobile download page says:

  • Log into Skype from any WiFi zone to make free calls and send instant messages to anyone else on Skype, anywhere in the world, any day of the week.
  • WiFi connection or 3G/2G data connection (we cannot guarantee voice quality over 3G/2G. You may also be liable to additional data charges so please check with your operator before using)

Truphone’s original iPhone outbound calling offering was also only available using the iPhone’s WiFi capability; however, details of their architecture were never revealed.

Accessing VoIP via a Wireless Carrier

Over the past year we have seen the rise of several services that use the alternate architecture where a call is placed via a local access point to a hosted server that then opens up a Skype client. The server-based Skype client then completes the call as a Skype-to-Skype call.

skypeliteWhile originally pioneered by iSkoot, a service using this architecture, such as Skype Lite beta, makes a call to a SIP Gateway server via a local point of presence while data about the call is concurrently sent via the underlying data network to a hosted Mobile Gateway. This dedicated gateway then sets up a Skype-to-Skype call between the SIP Gateway — now connected to your cell phone — and the destination Skype contact. Skype chat messages can also be exchanged concurrently over the data network. We are now seeing various offerings using this architecture:

  • The highly successful Skypephone offered by 3 in nine countries.
  • iSkoot providing service for a wide range of phones including BlackBerry, Nokia and T-Mobile’s G-1.
  • Truphone Anywhere: when Truphone found they could not offer a highly reliable service over 3G networks (largely due to device resource considerations), they launched Truphone Anywhere that allows Truphone calls to be made over a 2G (GSM/EDGE) or 3G (UMTS/HSPA) voice/data network as well as over WiFi access points.
  • Skype for Mobile beta – Skype’s first attempt to go beyond Skype for Windows Mobile onto other platforms such as Nokia N-Series and E-Series devices. This never got out of the beta phase; while you could use Skype chat anywhere, the voice service was only to be available in a limited number of  countries (that did not overlap with countries where Skypephone was available).
  • Skype Lite beta: building on the Skype for Mobile beta experience to a service that supports not only smartphones but also over 90 cell phones that support a Java client and include basic web browsing and data capability. According to the Skype Lite page it appears that Skype is working with carriers in ten countries to support this service.
  • Truphone for iPhone 1.12 release: makes Truphone calls either over WiFi or any cellular network using an iPhone, building on their Truphone Anywhere experience.

Key features of these server-hosted VoIP client services:

  • They are most cost effective when calling from your home country or local calling area. You could incur long distance or, when outside your home country, roaming charges that would run up quite quickly.
  • An unlimited or high cap data plan minimizes costs associated with using these services.
  • Only Skype provides a full Instant Messaging capability covering both chat and presence. Some Truphone offerings have shown support for SMS messaging.
  • Calls to Skype contacts are free.
  • Calls to mobile numbers outside U.S. and Canada will still invoke the charges incurred in “caller pays” mobile services.

Why only the cost of a local call? Your cell phone makes a call to a local number which puts the call through to the service’s SIP Gateway. At this point you connect into a Skype-to-Skype call for which there are no termination charges involved as a result of Skype’s unique (and secure) peer-to-peer architecture.  The same applies to Truphone where Truphone-to-Truphone calls are free.

This Skype Lite beta announcement portends that we could be seeing Skype-to-Skype calling, along the lines of 3’s popular Skypephone service in nine countries, become available to mobile customers having a much broader range of cell phones and in up to ten additional countries.

One other service that can be accessed from any phone is Mobivox. However, there you have to build up and manage your address book online such that VoxGirl can help you make your calls; it does not access your mobile phone address book. It’s purely a voice service with no messaging component (other than using SMS to facilitate setting up calls under certain circumstances).

While we’re getting a first step in driving down mobile costs for international calling, the next step needs to be finding a user-friendly way to drive out roaming costs. MaxRoam and Truphone’s SIM4Travel are starting to offer some hope on this front; however, at the moment their costs for USA-Canada calls are much more than my Rogers roaming charge. The winners will feature not only lower costs but a very friendly user interface, interacting with the device address book, that also provides the most complete ranges of services in terms of coverage and complementary conversation modes, such as IM.

  • Truphone for iPod Touch: Accessing Skype Contacts and Social Media
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About Jim Courtney

Bringing over thirty years' experience in the sales, marketing and management of cutting edge technology businesses.

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