Mobile VOIP is on the march

Startups beat Skype to the punch in offering mobile VOIP services

Nearly one year after Skype stole the headlines at the 3GSM World Congress with its plans to offer a mobile version of its Internet phone, a couple of nimble startups -- and not the Net telephony pioneer itself -- appear to have found a way to make this type of service work, both technically and commercially.

Earlier this week, Jajah announced a new mobile VOIP service that allows smart-phone users to make low-cost and, in some cases, free international calls. Customers simply enter Jajah's mobile Web portal through their handset's browser, enter their user name and password and then make a either a free or low-cost call.

The launch of Jajah Mobile Web comes on the heals of a mobile VOIP (voice over IP) offering by Fring, which, unlike Jajah, requires users to download software and install it in their Internet-enabled handsets. The Fring service gives mobile users access to P-to-P (peer-to-peer) VOIP offerings such as Skype and Google Talk.

Microsoft appears to have its finger on the pulse of mobile VOIP, too. Next week in Barcelona, the U.S. software giant will unwrap a new version of its Windows Mobile OS that will supposedly enable carriers and device maker to add VOIP functionality to Windows Mobile devices.

All these announcements -- and the many more expected at this year's 3GSM World Congress -- come as Skype, which essentially stunned the mobile phone industry last year with its VOIP plans, acknowledges technical and commercial hurdles.

In a recent interview in Finnish newspaper, Skype co-founder and CEO Niklas Zennström spoke of "technical obstacles" and conceded that efforts to make Skype work had been taking "much longer than expected."

At the Consumer Electronics Show in Las Vegas last month, Eric Lagier, Skype director of business development for hardware and mobile, called the lack of attractive flat-rate fees for most mobile phone services a key commercial hurdle to mobile VOIP usage. He said the company didn't want to be in a position of claiming that its service is free, but facing users who at the end of the month are docked with a huge broadband usage fee.

At last year's 3GSM World Congress, Skype and the Hutchison 3 Group (Hutchison 3G) announced a partnership to provide what they had hoped to become the world's first commercial VOIP service for mobile phones.

Hutchison 3G, which operates IP-based mobile broadband networks in several European markets, was one of the first mobile phone operators to embrace VOIP, a technology many in the industry view as a major threat to their cash-cow voice business.

But industry experts admit that challenges remain. One hurdle in providing quality VOIP service over mobile handsets is the uplink, which is currently too slow to support quality voice calls, John Giere, chief marketing officer at Alcatel-Lucent, said in an earlier interview.

To increase uplink speeds, operators of GSM (Global System for Mobile Communications) networks, which dominate Europe and many parts of Asia and Latin America, will need to upgrade their networks with HSUPA (High Speed Uplink Packet Access) technology, which will give operators "the bidirectional capability they need to run real VOIP," he said.

The high-speed technology is not expected to become commercially available in volume until the latter part of 2007 or early 2008. Operators are presently busy rolling out the downlink counterpart HSDPA (High Speed Downlink Packet Access).

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