Zer01 Plays the "Interconnecting Carrier" Angle

Some observers might wonder how the new mobile service created by Zer01 is different from existing applications that provide VoIP calling over a mobile handset. Recently, Skype for Apple iPhones has gotten lots of attention, for example.

“I do not really see any comparison to the Zer01 value add here,” says Mark Richards, Pervasip CIO. Pervasip provides the underlying network, billing and customer care for the Zer01 effort.

The Skype calling feature uses a Wi-Fi connection, not the AT&T data network, and can require per-minute calling charges, where Zer01 uses an IP wide area network and a GSM wireless network for access.

And Richards argues there is a difference between an downloaded application running on top of a mobile operating system, and a native application. “To run VoIP over GSM is stodgy,” Richards says. “It is not simple.”

One problem is that the downloaded app is always contending for processor resources. To run a VoIP path on top of the OS, rather than natively on the phone, compression and decompression is required, and that uses processor resources.

Calling gateways is more complex, so there is some kind of inconvenience, he argues. “I have not yet seen a seamless desktop process that really changes habits,” says Richards.

United Technologies Group has developed a mobile application that seamlessly sits on the cell phone and takes over a phone’s dial pad by replacing it with its own, Richards notes.

The other great confusion is over the business model. To date, many firms that do not own their own mobile networks have operated as mobile virtual network operators, leasing wireless capacity and services on a wholesale basis, and then selling at retail.

Those of you familiar with the “unbundled network element-provisioned” (UNE-P) model will see the similarity. An MVNO or UNE-P reseller essentially is engaging in price arbitrage.

The difference here is that Pervasip is a licensed carrier. It has the legal right of interconnection with other carriers. So Zer01 essentially and simply interconnects with GSM mobile providers around the world. It is not a reseller of their services.