T-Mobile CEO: VOIP will have No Major Impact

Don't expect new mobile phone services based on the Internet Protocol to become nearly as prevalent as those running over PCs. That's the view of Hamid Akhavan, CEO of T-Mobile International AG & Co. KG, one of Europe's largest mobile phone operators.

VOIP (voice over Internet Protocol) services provided over mobile phone networks will have "far less impact" than those offered over fixed-line networks, Akhavan said Tuesday on the sidelines of a news conference at the 3GSM conference in Barcelona.

"There are all sorts of technical issues that make mobile VOIP services difficult to implement," he said. Technical issues related to how networks pass on IP addresses of mobile users have not been completely resolved, he noted. "Take reachability, for example: How can the call come to me?"

Akhavan also said emergency phone service and "always on" connectivity are also big issues, since staying online takes up bandwidth on pricey mobile networks.

And then there's price: "When people talk about VOIP, they think free," Akhavan said. "With any mobile service provided over the Internet, you're going to need to buy a data package."

Mobile VOIP "will take a small share" of revenue generated by mobile voice services, he said.

Akhavan's views on the technical and commercial hurdles are shared even by some of the key advocates of mobile VOIP -- namely Skype Ltd.

In a recent interview with a Finnish newspaper, Skype co-founder and CEO Niklas Zennström spoke of "technical obstacles" and conceded that efforts to make Skype work had been taking "much longer than expected."

Earlier, Eric Lagier, Skype director of business development for hardware and mobile, called the lack of attractive flat-rate fees for most mobile phone services a key commercial hurdle to mobile VOIP usage. He said the company didn't want to be in a position of claiming that its service is free, but facing users who at the end of the month are docked with a huge broadband usage fee.

At last year's 3GSM World Congress, Skype and the Hutchison 3 Group (Hutchison 3G) announced a partnership to provide what they had hoped to become the world's first commercial VOIP service for mobile phones.

Hutchison 3G, which operates IP-based mobile broadband networks in several European markets, was one of the first mobile phone operators to embrace VOIP, a technology many in the industry view as a major threat to their cash-cow voice business.