Mobile VoIP apps don't have enterprise appeal yet

Mobile VoIP apps may promise to slash users’ phone bills, but the lack of security, patchy performance and need for constant wireless broadband access mean that it will take time before enterprise users consider adopting the technology, said analysts.
Shirleen Kok, general manager of market research firm GfK Singapore, said mobile VoIP (Voice-over-Internet Protocol) apps such as Viber offer free local and international calls for users via 3G or Wi-Fi networks, which is a good cost-cutting option. However, their reliance on data, wireless networks and hardware specifications make them a less appealing option over the traditional bundled minutes offered by telcos, which both consumer and enterprise users are familiar with, she pointed out.
“Given that the prices of voice calling bundled with a data plan offered by [Singapore’s] three operators are affordable, it is expected that adoption of smartphones and subscription of these plans will continue to increase,” she added in an e-mail.
Sherrie Huang, research manager of unified communications and collaborations at IDC Asia-Pacific’s practice group, went on to add to Kok’s perspective. She said that while these apps will probably not have significant growth in the enterprise space at this stage, they may still serve a purpose for consumers who require free calls without expectations of high voice quality.
Besides call quality, enterprises will require the reliability and security for their voice services as well as features such as call forwarding and voice mail, among others. So far, these features can only be provided by enterprise service providers or carriers that know how to manage the backend network well, she said.
“Mobile VoIP will require high mobile data network SLAs (service level agreements) on bandwidth and [latency], which is very hard for app developers to [access] or manage,” Huang noted in her e-mail.
Carving a mobile VoIP niche
Viber, an iOS-based mobile VoIP app introduced to consumers last week, is not the first of its kind, acknowledged a company spokesperson.
That said, Efrat Cohen, who oversees Viber’s media relations, told ZDNet Asia in an e-mail that the app is the first mobile app to be “modeled after an actual phone”. This means that instead of users having to create an account with the developer and managing a “buddy list” of fellow users, Viber automatically identifies the people within one’s contact list who have downloaded the app, and users can start calling Viber contacts immediately, she noted.
“Basically, the standout benefit is that users don’t need to have the app open to receive a call as it is always on, and calling with Viber is like using a regular iPhone dial pad and contact list,” she added. The app’s performance will also improve over time, she promised.
In comparison, rival VoIP provider Skype’s mobile app requires users to add their friends to their contact list. In addiiton, both parties must be signed in to the app at the same time before one can make a call to the other, Cohen pointed out.
The Skype spokesperson ZDNet Asia interviewed declined to respond directly to Viber’s value proposition. Instead, she stated that the company has been available on both 3G and Wi-Fi networks through its Skype app, which straddles across iOS, Android, BlackBerry and Symbian mobile platforms “for some time now”.
Furthermore, she noted that many of Skype’s enterprise users not only run its software on their desktop PCs, but also on their mobile devices, too. This allows them to stay connected with business associates on the move and to make free Skype-to-Skype calls or low-cost calls to landlines and other mobile phones that do not support the Skype app, added the spokesperson.
“The business market is important to Skype and we are focused on addressing it,” the spokesperson stated. She backed this up, citing internal research which revealed that about 37 percent of Skype users reported they used Skype for business purposes in the first quarter of 2010.
Viber’s Cohen said the company’s first release of its app is targeted primarily at the consumer market. However, it sees the potential and added benefit of entering the enterprise space, and it intends to do so “in the future”.
“Phenomenal” growth expected
Both mobile VoIP providers’ enthusiasm for the enterprise space lends credence to IDC’s observation that there will be “phenomenal” growth in mobile VoIP in the future, particularly through replacing IP phones in developed markets, said Huang.
She added that one of the research firm’s 2011 predictions is the “death of the IP phone”, as smartphones, tablets and video functions marginalize investments in IP telephony. In turn, the price and demand for IP telephony will fall after 2012, the analyst reckoned.
Huang balanced her prediction, however, by pointing out that carriers, aided by regulators, will put up a fight to protect their voice business from being eroded by VoIP vendors. For instance, countries such as China have denied IT vendors the permission to set up VoIP and mobile VoIP services locally, she said.
Additionally, in the enterprise space, mobile app developers will have to convince carriers to enter into close strategic partnerships in order to integrate their software with the backend mobile network, the analyst stated. Only then will the developers be able to ensure high SLAs and reliability needed to satisfy enterprise customers, Huang noted.
Article via ZDNet