Global Insight Perspective | |
Significance | The new service will provide VoIP-based international calling to mobiles worldwide. |
Implications | Players such as Mino are seeking to exploit the ubiquity of mobile phones, as well as high traditional mobile rates to overseas locations. |
Outlook | Mobile operators are already cutting their international rates and some are looking at partnerships with start-ups. |
Mino Wireless, the provider of low-cost international calls over mobile phones, has announced that it has completed three months of its international call service from mobile phones. The service is available to those subscribers of Cingular Wireless, Sprint Nextel or T-Mobile USA (in the United States) with a data plan and a Java-enabled handset. International calling is provided via VoIP and costs some 2.2 cents (US$0.022) per minute to some 40 destinations. Such rates are far lower than the standalone international rates charged by mobile network operators. For instance, according to Mino Wireless, a United States-to-China call costs US$0.15 per minute, but only US$.0022 from Mino Wireless. To date, some 20,000 customers worldwide have signed up to Mino's International Call service, which was launched in January 2006. The service can be accessed in any country by buying a local SIM card and installing MINO software over the phone. It is currently predominantly being targeted at business travellers, immigrants, and international students.
Mino Wireless, which is headquartered in Sunnyvale, California, is not the only company to be developing a mobile VoIP capability. Skype, IPDrum, iSkoot and others are currently working to provide internet telephony-based services (such as Google Talk, and Yahoo Messenger with Voice) over mobile phones. In some cases, mobile operators, including E-Plus, are themselves facilitating the launch of third-party internet telephony services to their own customers (see Germany: 2 September 2005: Skype Moves into Mobile VoIP with E-Plus).
Outlook and Implications
- Progress on Mobile VoIP Continues: Mobile is not only the most plentiful, but also the most accessible platform for voice communications. Small wonder then that the likes of Mino are seeking to incorporate a VoIP capability into mobile phones. The traditionally high charges set by mobile operators for international calls have long been an inhibitor to personal and business usage, but this also makes the mobile international call sector ripe for price arbitrage. A number of phone card providers and other operators (see United Kingdom: 31 March 2005: Carphone Warehouse Launches Cheap International Mobile Calls) have launched SIM-only discounted international call services. The likes of Cicero Wireless are also developing FMC services that will allow end-users to make VoIP calls via WLAN networks in the home, offices and Wi-Fi hotspots.
- Threat to Mobile Operators: International calls generate a small overall proportion of mobile operators' total revenues, but the type of service Mino Wireless offers does pose a threat. Few users buy into monthly contracts with inclusive international minutes, which means that calls to international destinations are made on a standalone basis. Given the cost-conscious nature of many international callers, such as businesses and overseas students, the type of service provided by Mino Wireless may be attractive, as long as the VoIP call provides sufficient quality of service. To counter this threat, mobile operators have been cutting their own international call rates, as well as making voluntary moves to reduce international roaming fees (see Europe: 9 February 2006: EU to Legislate on High Roaming Charges; O2 Drops Irish Roaming Charge).