Operators not doomed by Microsoft's VOIP plans

A mobile voice over IP (VOIP) client from Microsoft will kill mobile operators, according to blogs and news sites -- but analysts say the product is no big deal.

Cell phone operators' share prices remained steady, despite blogs that screamed Sell Vodafone. Microsoft's chief executive Steve Ballmer had indeed announced a mobile version of his company's voice-capable business IM system, Microsoft Office Communicator, one week ago, at 3GSM, but visitors were apparently too bamboozled by what The Business described as Ballmer's "eccentric and effusive delivery" to realize the significance.

The voice-ready version of Communicator will allow users of the IM service, who have Wi-Fi capable phones, to sidestep the mobile networks and call each other over the Internet using Wi-Fi for access -- a feature Ballmer demonstrated at 3GSM.

"Is there a Symbian version?" asked an unimpressed analyst, Dean Bubley of Disruptive Analysis. "Are they doing it over 3G? Skype is doing 3G with Hutchison, and has a Symbian version. Before we get too excited about this, it looks like Microsoft is behind the curve."

"Microsoft now has a mobile VOIP client -- to join the thirty-seven other Windows VOIP clients, from vendors like SipQuest, PCTel, Cicero and Skype," said Bubley. "And these are ones that can switch between Wi-Fi and ordinary cellular services."

The main importance of the announcement is to show that mobile VOIP is now important enough for a sluggish brute like Microsoft to lurch aboard, said Bubley: "The history of Microsoft has been to leave it up to third party developers, and then move in when it is important enough. It's institutionalized mobile VOIP."

Vodafone remained unmoved: "A thousand things are already factored into Vodafone's share price and this is one of them," said Bubley. Indeed, with IMS (IP Multimedia Subsystem) already appearing in mobile operators' networks, Vodafone and the operators have an opportunity to take the lead on VOIP and other IP services, he said.

The interesting thing will be whether Microsoft attempts to pre-empt or oppose IP cellular services or, like Skype, works with the cellular operators.

"It will be interesting to see whether Microsoft waits for a proper cellular solution to do voice over IP over 3G, or tries to pre-empt it," he said. "Will Microsoft see VOIP as something that should be done inside an operator controlled environment, or on top of naked SIP outside operator control?"

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