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Why Mobile Operators should not Deploy VoIP on the Handset

By: Paul E. Jones
June 13, 2012

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For 13 years now, the standards group known as 3GPP has been hard at work trying to define one very large, complex SIP-based replacement for the mobile handset and the PSTN. This beast of a system is known as IMS and it defines not only the core network functions, but also the use of a SIP client on the mobile handset. But what mobile operator would dare put SIP on the handset? That is just asking for trouble.

Mobile operators presently enjoy raking in tons of cash by selling “minutes” of voice. It’s the one place where they can still do that. As people get rid of their home phones and move to mobile phones, operators have been carefully managing phone plans to ensure high margins and high profits. And who can blame them? They’re in business to make money, after all.

Suppose a major operator like Verizon or AT&T decided to deploy SIP on the handset. What do you think would happen almost immediately? Dozens of third-party voice and video service providers would want to have their clients on the phone. They would all want to be the default client used when a customer makes a phone call. It would seriously eat into Verizon’s profits, because customers do not need Verizon’s voice minutes any longer. All they need is bandwidth. As was largely done with the landline phone, the carriers would become a “dumb pipe” again.

And just how would a mobile operator ensure that voice quality is maintained? In some areas, there are so many people using data that the operators do not have enough bandwidth to meet everyone’s needs. A VoIP call using SIP would simply fail, so the service providers would have to do something to ensure that their VoIP client would be given preferential treatment over other data traffic. But doing that steps all over the toes of net neutrality. Just today, in fact, there was an article about the Justice Department investigating cable companies for giving preferential treatment to video services provided by the cable operators. The same issues would be faced by mobile phone carriers who decide to give preferential treatment to their own voice/video services.

So, why even bother? The moment a mobile phone operator enables VoIP on the handset, that operator will be pressured by every competitor around the world to be given equal treatment. Margins will erode and the mobile carrier will suddenly find that it simply is not profitable to even provide voice service.
IP telephony will certainly be used on mobile phones. In fact, one can use Skype and other services today. However, it just does not make business sense for mobile operators to switch to VoIP on the handset. In the core network, of course, using VoIP makes a lot of sense and most service providers have already made the move. Something else that makes sense is offering H.323-based videoconferencing capabilities as an adjunct to the legacy voice service. None of the IP-based technologies would be given any guaranteed quality of service, but that would be fair and the mobile operator can still sell “voice” minutes.