The Future of Phone Calls: Carrier Extinction?

The Future of Phone Calls: Carrier Extinction?

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Not many people expected the internet to bring this revolution in human interaction and communication, and before it came to be, video-conferences on your wrist seemed liked something too far off and too futuristic. Now it is trivial, and in a sense, I think peoples’ heads are opening up to the possibilities of these new technologies without as much skepticism or doubt. To put it shortly: the line between science fiction and science fact is blurring every day. Now we’ve got so many alternative methods of communication, like simple text instant messaging, picture-based ones like Snapchat, and video calling – perhaps the most fleshed-out solution for a genuine human experience. All of these methods revolutionized the way we interact, the way we engage with our peers and even the way we talk, in the form of speech simplification. When you put it that way, that one Yo app makes me a little scared of the future…

But regardless of all these new methods of communication, the quintessential one for serious developments be it informal happy news or important plans is still phone voice calls. It is not entirely clear if it has survived this long on tradition alone, given this particular method of interaction has seen fewer technical revisions under the hood in mobile history when compared to our rapidly evolving internet services. Towers still get planted every day all over the world and still process innumerable amounts of calls. But the internet brought with itself its own spin of long-distance voice conversations, too! And as internet speeds got faster, services improved as well. Nowadays, Skype is the de-facto voice and video chat client for most users around the world, and services like Apple’s Facetime have helped popularize video-calls on phones since early 2010.

Something that is being pushed in the American mobile market is a repertoire of new services trying to tackle these offerings. As it stands, applications like Skype or Viber are great for users, but not-so-great for carriers. Mobile operators haven’t traditionally seen them as threats, but now that these apps have hit their platforms so prominently, they do. These communication services are varied, and while some offer silly memes with captions, others directly transgress into the territory of carriers, which is their long-dead monopoly on mobile voice calling. And so, they are looking at new things they can do.

Last year, we couldn’t stop hearing about these offerings reaching the United States. In particular, I recall big fuzz about the newest Apple phones, the iPhone 6 and the iPhone 6 Plus, coming with Wi-Fi calling functionality. And we know Apple: when they add a new feature, they go all out on it, praise it as the revolution we all were waiting for, and usually claim it as their own. T-Mobile saw a great opportunity at this time: this carrier was not new to Wi-Fi calling, as it was one of the main and earliest adopters of the technology as far back as 2007, but their advertising got stronger as they would be the only carrier supporting this new feature on Apple’s latest product at the time of its release. Ever since then, journalists and bloggers put a little more focus on these new technologies, and more buzz started surrounding them. What are they, and how did they get here?

Wifi and LTE Calling

Wifi-calling is perhaps the most popular of the alternative internet-based services these carriers began pushing out. Wifi-calling is easy to understand on a superficial level: it simply uses Wi-Fi to provide better mobile phone coverage. This is perhaps the best benefit: there’s still many regions that simply do not get decent network coverage, yet wi-fi is so wide-spread that you are very likely to find a hotspot. This means that wherever there is Wi-Fi, you’ll be able to have voice (and text, for some carriers) conversations at a much cheaper price (or null, but there’ll still be a bill at the end of the month). I think it’s safe to say that we all encounter spots in our homes or offices that have worse reception than the rest of the place, and this can be quite irritating. A poll by CivicStudies was commissioned by T-Mobile, and it revealed that an estimated 57% of U.S. wireless users have had dropped calls in or around their homes, so even if it’s not a problem you face, it is still an annoyance to millions.

But spotty coverage is only half the story: the real truth behind T-Mobile’s initial push was that their sub-par network that simply didn’t match the competition. The carrier touted the Wi-fi Calling revolution as “Wi-fi Unleashed”, and equated the development with opening millions of towers in a day. Now, while it is a great option, their real strategy was about saving face and revenue, despite CEO John Legere’s claim that “we’ll do everything we can to solve your problems”. The fine-print of their promo page states that “devices using wireless connections may be vulnerable to unauthorized attempts to access data and software stored on the device”, which isn’t entirely enticing either. But leaving security and reasons aside, wi-fi calling does offer better a better service.

Voice calls through traditional networks usually top out at 12kbps, while we all know just how fast our wi-fi speeds can get. This has a huge impact for the possible quality of voice calls, and services like Skype more than triple this width – and this can be immediately noticeable to those who use Skype or any other of these services regularly. I do, and sometimes I get confused because the call is so clear and so static-less that when I don’t hear a sound, I have to check if the voice-call dropped or not. Phone calls can be pretty clear, depending on your hardware and your caller’s, but even then there is always a more tinny, static filled feel to these in my experience. The other advantage to wi-fi calling is efficiency in transmission: your router can act as a tower, making the process more efficient for you and your carrier. Simplified, this can mean a more linearly direct pathway to the call processing centers, rather than having the data reach the network tower at who knows where, then have it go through the messy wire-lines. It cuts them some slack which in theory would mean more work and capital applicable towards other areas… right?

Using internet connections isn’t anything new, though. Voice over Internet Protocol (VoIP) services such as Skype have been around for a while and have gained immense popularity. But these require a separate account with separate credit to make the calls, although many of these offerings grant you cheap international rates that modern American carriers couldn’t compete with. The big difference, however, is that VoIP services can’t automatically and seamlessly switch from Wi-Fi to mobile networks, and if your wi-fi drops on that Skype call, the call will drop too until it latches onto your mobile connection. However, while many advocates (like Apple) made it sound like the transitions on Wi-Fi calling would be seamless, it was not, as T-Mobile’s own fine print once again states the uncomfortable truth by saying that “devices will not transition between wi-fi and the cellular network”. Bummer!

There is, however, a third method of handling voice calls through the internet that solves this hassle: Voice over LTE, or VoLTE. With this service, your calls already start as packets of data, unlike with traditional cellular methods. This way, it doesn’t matter if it’s Wi-Fi or cellphone networks, as data packets remain data packets. Think of it as not having to switch cars when you want to enter a different highway (which would be extremely inconvenient). This means that the transition would be seamless, and an algorithm could also choose the more reliable or optimal option for handling the call given the available network reception or traffic and wi-fi connections. VoLTE is offered by carriers like Verizon, and the service is expected to hit the market in a big way in 2015. This leaves no doubt that carriers are effectively trying to once again reclaim their monopoly on the voice call services.

Threatening Competition

The transitions towards internet-based services by these providers is nothing short of hypocritical, in some ways. During T-Mobile’s push for their Wi-Fi calling service, Verizon’s CFO Fred Shammo said that they “built our voice platform so extensively [that] there was never a need for us to tell our customers, ‘Oh, our network is not good enough so you need to go on Wi-Fi to complete your call'”This was an obvious jab at T-Mobile’s bad call performance, which according to rootmetrics ran behind at 74.4 points compared to Verizon’s leading 82.0. AT&T also said that the company didn’t have a “burning desire” for Wi-Fi calling, and that other carriers were aggressively pursuing it because their coverage and performance were worse. Yet this service is still coming to Verizon and AT&T this year…!
The reason why, is the previously mentioned competition. Skype’s Android app is seriously terrible, and I hate it. Yet the service itself is top-notch and so deeply integrated with the huge desktop popularity that it’s still an app I use many many hours every week. Since Microsoft bought Skype in 2011, the service has seen a rapid expansion: in 2014 it had grown 82% in the number of users appdata had numbered the year before. More over, China alone had over 100 million Skype users 2 years ago. Then there’s their mobile hotspots that offer free Wi-Fi to further enhance the service that already reaches over 100 million Android users. All of this reportedly cost the mobile carrier services $100 million dollars per day. As more people work remotely, video-calling increasingly becomes the norm. I know this because I happen to work remotely! And when a video-calling service is also integrated with such a strong voice-calling service that also has VoIP calling, built right in, that offers cheap rates… you’ve got a very strong and versatile platform that is worth using over carrier solutions – even if the app is undeniably awful.

Then there’s growing mobile services like Viber, which somehow managed to pass by the United States largely unacknowledged. The company has been around for a while, and it now fosters one of the largest user-bases of any mobile service… yet many don’t even know it exists. In 2014, there were over 449 million unique IDs registered on the service, with 209 million active monthly users. While it is not as big in the US, countries like Ireland saw 40% of its mobile users have Viber on their phones, and Rakuten the japanese company that purchased the service, says that 12% of the world’s mobile device owners have installed Viber… a number that is very hard to believe –  let alone swallow, especially for carriers I imagine. Nevertheless, they are lucky as apparently only 7.2% of Viber users reside in North America as most reside in Europe (and funnily enough, it was my European friend who first recommended me the app last year and now it is huge in my country).

But there are so many services that take their share of the pie with these voice and video communication services, and these are only two of them. There are thousands of alternative offerings, like Apple’s Facetime on iPhones and the popular Hangouts service from Google – a company that also tried to reign supreme with its Google Voice service that allowed free calls for and to US residents. And there’s a giant on the horizon, as world-champion of Instant Messaging Whatsapp will bring forth its calling features that they have already began rolling out for select users to test out. All of these competitive players surely put tension on mobile operators.

What model will prevail?

When you think about it, both services offer their advantages and disadvantages… but there’s an overwhelming amount of positives leaning towards internet-based voice calls. The quality of the calls can be refined further, and the cheaper or non-existent rates that are allowed through Wi-Fi calling would certainly be comfortable for users’ wallets. But on this point, I can’t help to ponder that if once traditional network models are long gone, the carriers would go all-out on monetizing internet-calling in some way to squeeze pennies out of us. After all, while current Wi-Fi calling carrier offerings are mostly “free”, if they completely replace traditional cellular technology, where would the big money be for them? I don’t think they’d be interested in making less of a buck than what they make now.

But at the same time, the third-party apps and services really put a strain on these companies – if they severely monetize their internet-calling, there will still be free alternatives for the job like hangouts and competitively cheap alternatives for VoIP calling services like Skype – and both would piggyback on the data plans that these carriers cannot stop offering ever again. Their models are likely to be undercut by hungry companies that can simply build an application to deliver messages and calls, without having to spend millions on network infrastructure all over the country. While it might sound unfair, it could be perceived as a natural step in the evolution of hardware and software, and carriers will have to adapt to it in some way.

If carriers move to the more optimal and quality-rich internet-based calling, however, they would have to work many things out. We already talked extensively about their network data models, and how their data caps and traffic severely hurt the mobile internet experience and hurt the progress of these technologies. This would be a necessary technical difficulty to overcome if they mean to move to purely internet-based mediums, especially when you account that these services would further occupy the network with more data being transferred, which if not dealt with appropriately would result in slower LTE speeds for everyone around. Then there’s the fact that current VoLTE technologies do not yet work from carrier to carrier: you can’t place a VoLTE call from one to another, but Verizon and AT&T are moving forward to inter-operability cooperative developments. If all of these issues are tackled appropriately and are taken in the right direction, however, the carriers would be able to hold onto their phone-call-dominance for a while longer, but they would still have to be very careful with their pricing model as under-cutting options spring up every day.

Carrier extinction?

Carriers will necessarily always have their place. With an increasingly digitalized world, the move towards internet-based phone services was predictable. It was expected that services like Skype would transition to the mobile world, but not many expected their evolution to be of this caliber, and now many services are looking to integrate the functionality to cash into the trend. This is another form of fragmentation of service, in a sense. However, I’d argue that having a degree of choice does have its merits. If you don’t like Skype, just use Viber, or Whatsapp. But more issues do arise from this model: the reliability of your phone experience would now not just depend on a single entity (carrier) and their network, but also the service provider (app). If either is faulty for a period of time, your experience suffers.

More over, the fragmentation’s negatives become apparent when there’s no standardized solution for voice-calls, as many people could use different services incompatible with each other, thus barring off interaction between users. And finally, phone numbers are universally convenient and cell-phones in this manner would probably never disappear at this point in time in their entirety, given their tradition that is already deeply integrated into society and most importantly bureaucracy. Could you imagine having to fill a form and choose between hundreds of services like Skype or Google Voice? Not to mention some usernames would be embarrassing to write down in a government form! And then there’s the fact that many of these platforms do not have proper security standards – but then again, T-Mobile’s previously cited fine print wasn’t too re-assuring either.

Phone numbers are here to stay,  that’s guaranteed alright. It is just too convenient, and conveniently integrated at this point in time. But the method through which these services interact is subject to change, and as technology improves I’m sure we’ll see even more unexpected developments that carriers or other developers will have to adapt to. With the idea of data-only plans gaining traction in key regions, and talks about Google’s incursion into the mobile operator world, it is clear this is a transition that will not turn retrograde anytime soon. And with the latter’s emphasis on data and wi-fi hotspots, we might have a carrier that will get it right. Whatever the future holds, all we can hope is that it works better than what we have.

 

What do you think the future of voice calls will be like? Who will be the major players? Share your speculation down below!