It was predicted years ago, but it took some time to materialize, but Business Week is confirming that the trend of nearly free international telephony is becoming real.
“Gorilla, iCall, and a growing number of other services rely on what’s known as Voice over Internet Protocol technology that delivers speech via the Internet in much the same way as e-mail. VoIP calling is already raising a ruckus in telecommunications, putting pressure on the price of land-line calling and luring subscribers toward upstarts like Vonage (VG) and Comcast (CMCSA) away from incumbents such as AT&T, and Verizon (VZ). Now, the technology threatens to erode sales for mobile-phone service providers too.
By 2011 the number of mobile VoIP users around the world may rise to 100 million from 7 million in 2007, according to ON World, a consulting firm based in San Diego. ON World estimates that in 2011, mobile VoIP voice services may generate $33.7 billion, up from $516 million in 2006, the most recent year for which the figure is available. If that sounds like a breakneck pace, consider the growth trajectory for Jajah, a provider of wireless VoIP, which had 10 million users in April—a fivefold increase in just a year.
Wireless carriers are expected to generate $700.7 billion in sales of voice services this year, according to consulting firm Ovum. Still, carriers in the fiercely competitive mobile-phone industry will be none too pleased with newcomers snapping up a portion of the almost one-quarter of all wireless minutes now devoted to long-distance and international calls. Insight Research estimates that together, international and long distance will make up 24% of the 1.2 billion wireless minutes used this year.
VoIP technology is likely to make deeper wireless inroads soon. Skype, the eBay (EBAY)-owned service used by more than 338 million people to make free PC-to-PC calls, later this year plans to release a new product called “Skype for your mobile” that will let customers use local wireless minutes to make international calls.”