Asked what it could do to counter third-party providers once it starts delivering VoIP itself, Verizon Wireless gave hints as to how it plans to approach data services in general.
"We have moved away from unlimited data plans," Verizon Wireless president and CEO Lowell McAdam said at a question-and-answer session at CTIA. "The excitement of an over-the-top application like [Skype] in an unlimited environment means one thing to a customer. In an environment where you're paying for every byte, that means something totally different," McAdam said.
In addition to charging per bit, Verizon plans to tackle the business of mobile VoIP the same way it's handling wired services: by making it part of a bundle that only the huge wired and wireless carrier can offer.
"The voice service will become part of something different, something larger," said Ivan Seidenberg, chairman and CEO of Verizon Communications. "It's not that Skype's doing anything wrong, but eventually they're going to get outpaced," he said.
By contrast, AT&T suggested it ultimately will rely more heavily on selling low-priced bits.
"The way the world is going, it'll just be, 'How much data do you want to buy?' and you do whatever you want over that data," said Ralph de la Vega, president and CEO of AT&T Mobility and Consumer Markets, during a media lunch at CTIA. Though he noted it was too early to talk about rate plans for LTE, which AT&T is not expected to roll out until 2011 or later, de la Vega said the nature of the technology will reduce the operator's cost to deliver a given amount of coverage. For subscribers who aren't comfortable with the idea of buying data, AT&T may have to devise rate plans that translate bits of data into minutes of use, he added.
Clearwire, the one mobile operator that is already relying on 4G, believes quality is the key to VoIP. It plans to make money partly by delivering that quality.
Clearwire already sells VoIP for use on WiMax home modems, and it may offer mobile voice through Sprint Nextel, using the cellular carrier as a mobile virtual network operator, said President and Chief Architect Barry West. Like Verizon, Clearwire plans to add value to its VoIP offering by bundling it with other services. But the company can also make money from third-party providers, West added. The company will sell access to the higher layers of its software stack, on a non-discriminatory basis, so VoIP companies can get the low latency they need for high-quality calls, he said.
Sprint Nextel officials weren't immediately available for comment.
Yet for the mainstream carriers, turning voice into just another application on a packet-based network may still be years away.
To begin with, their 3G networks will stay in place as LTE is gradually deployed. Even Verizon, expected to be the first major operator to commercially offer LTE, said its EV-DO (Evolution-Data Optimized) infrastructure will still be around in five to seven years. Until LTE is available everywhere, handsets are likely to have two radios so they can fall back on 3G for voice.
In addition, several major network vendors have teamed up to develop a specification for handling VoIP calls like traditional voice traffic. The VOLGA (Voice Over LTE via Generic Access) standard will let carriers continue to use the MSCs (mobile switching centers) already in their networks to handle voice calls, said Steve Shaw, vice president of corporate marketing for Kineto Wireless. Kineto is a member of the VOLGA Forum alongside Alcatel-Lucent, Ericsson, Huawei, and other vendors.
MSCs are softswitches that are currently used with the circuit-based networks that handle voice calls for 3G. They are already tied in to billing, accounting and other systems, so carriers may continue to use them instead of migrating immediately to the service management platform for pure IP networks, called IMS (IP Multimedia Subsystem), Shaw said.
Over the next few years, the mobile operators may try several different approaches to the VoIP problem. Those could include relying on terms of service that prohibit VoIP use or using network management techniques to block the third-party services, IDC's Stofega said. Alternatively, some carriers might embrace other companies' VoIP services as popular products that drive more data use.
"If they're smart, they'll figure out a way to get around this," Stofega said.