Saturday, April 21, 2007

VoIP? What VoIP?

Nokia has been promoting the built-in WiFi and VoIP capabilities of its new N95 smartphone. This literally is its top of the line, with Symbian OS 9.2, all the alphabet soup of connectivity, a 5 megapixel Carl Zeiss camera, and an (unlocked) street price of $850-950 in the U.S.

[Nokia N95]Of course (like nearly all of Nokia’s smartphones) you can’t buy it from any U.S. carrier, but that’s a familiar story. However, it’s being aggressively promoted by a number of European carriers and retailers.

There’s one little problem, as Dean Bubley of Seeking Alpha reports:

it appears that some operator-specific variants [Orange and Vodafone Group (VOD)] have been named and shamed) have the native VoIP capability crippled, and also apparently don't work with downloaded third-party VoIP apps like Truphone’s.
Now of course all the carriers (such as T-Mobile) want to block or prevent network bypass, and manufacturers (even Apple) are willing to comply.

Still, this raises two obvious questions:
  1. Do the carriers think they can prevent this forever?
  2. If the carriers are successful, what’s the point for Nokia to continue to develop these features? And without such features, how does it sell high-price, high-margin phones?
AT&T tried to prevent MCI from getting access to its network, but the FCC slapped it down and mandated competition. Given the prospect of a similar ruling for mobile phones, perhaps that’s why operators aren’t bringing these phones to the U.S.

Of course, most of the world’s major mobile phone operators (Verizon, Cingular, Orange) are owned by the former wireline monopolists, filled with executives trying to recreate the monopoly they believe to be their birthright. (I would count DoCoMo in this camp, even though they are legally independent from NTT).

As a consumer and a researcher, I often long for the days of McCaw and AirTouch, when companies promoted change rather than fought it. Of course, McCaw sold out to AT&T (now the largest US carrier) and AirTouch to Vodafone (the world’s largest). Although Vodafone was founded in 1984 as the UK’s first competitive carrier, my British friends tell me it asserts raw market power as nakedly as any former monopolist.

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