"Voice Isn't Dead Yet," Optimist Says

Some have argued that mobile VoIP will grow mobile service provider revenues, an argument that makes more sense if one assumes the mobile VoIP is provided by a third party “over the top,” or by a new entrant without a significant legacy customer base.

In most other cases, a rational person would argue that mobile VoIP is more likely to harm mobile service provider revenues.  Mobile VoIP might represent less than 0.5 percent of overall service provider mobile voice revenues, according to ARCchart.

ARCchart sees similar issues for mobile service provider messaging. ARCchart expects that instant messages will exceed text messaging volumes by 2014 and continue growing rapidly, accounting for 65 percent of all message traffic pushed over mobile networks by 2016.

In 2012, global mobile VoIP service revenues might be about $2.5 billion. But mobile voice revenue overall could be in the range of roughly $1 trillion.

So the problem is that mobile VoIP represents a very small percentage of the legacy mobile voice revenue stream. To be sure, mobile VoIP is in its early stages, so a direct comparison of revenue means very little. So far, mobile VoIP probably has been important mostly as it reflects the loss of high-margin and high volume legacy voice call volumes.

But that is not likely to be the case, always. There will be 1.1 billion mobile VoIP clients in use by 2017, over half of which will be over the top apps, analysts at Juniper Research now estimate. Just how much revenue those mobile VoIP users will generate is the issue.

"As with Skype on the desktop, only a very small proportion will pay for the service," Juniper Research said.  “Wi-Fi mobile VoIP is potentially the most damaging of all VoIP traffic, as it bypasses the mobile networks altogether."

“We forecast that mobile VoIP over Wi-Fi will cost operators $5 billion globally by 2015,” said Anthony Cox, Juniper Research analyst.

In fact, a recent forecast by Visiongain suggests 2012 mobile VoIP revenues would reach only about $2.5 billion to $4 billion, globally.

“Many subscribers sign up to an OTT service without ever planning to pay a cent for it, and some industry players do not have a short-term revenue model at all,” said Cox.

Still, researchers at Analysys have in the past predicted that, as early as 2012, mobile VoIP services would generate revenues of $18.6 billion (EUR15.3 billion) in the United States and $7.3 billion (EUR.6.0 billion) in Western Europe, compared with fixed VoIP revenues of $11.9 (EUR9.8 billion) in the United States and $6.9 billion (EUR5.7 billion) in Western Europe.

It seems doubtful those levels of revenue have been realized, though. In fact, analysts seem to have overestimated the revenue mobile VoIP would represent, rather consistently. Though service providers are not without options, the direction is clear. As one self-proclaimed optimist said recently, “voice isn’t dead yet.” And that’s the optimistic view.