VoIP over 3G

VoIP over 3G is poised to become a big thing in 2006. Skype has just released its Pocket PC and Windows Mobile versions. I am told that a hack for smartphones even exists. Early reports from users attest to the voice quality of the Skype codecs (mostly iLBC) and it sounds promising when used with a processor over 200Mhz.

Furthermore, I am told also that Global IP Sound has released a new version of their codecs for the Pocket PC platform. Finally, 3G mobile operators are sharpening their pricing and Wimax looming on the horizon is a guarantee that the market will remain healthy in the coming years.

But a back of the envelope calculation makes me doubt about the economic viability of using VoIP over 3G. A quick overview of the data offers from Three and Vodafone Australia show me that based on a conversation using the iLBC codec (using those excellent benchmarks) would cost from 46 Australian cents on Three, 35 Australian cents on Vodafone up to AU$ 7.5 per minute when you go over your allocated 1GB per month and five times as much when you call from overseas (which would most likely be a GPRS call, hence not robust enough for a VoIP call).

Those rates have to be put in the perspective of a traditional voice call on those operators which cost, after discount, between 7 and 8 Australian cents. VoIP calls over 3G costs therefore five times as much as a traditional cellphone call and is currently limited to small capital centric footprints.

The unique exception would be using the iBurst services which would cost as low as 7 cents per minute. Such a service could then seriously contend as a fixed line/ADSL/mobile replacement provided they sign-up the right agreements with mobile manufacturers such HTC, retailers and customer premise equipment like Linksys One.