The smartphone age that helped to skyrocket the earnings of mobile carriers may soon be the tool to destroy it. With smartphones, carriers are now able to get their customers hooked up much more pricier voice and data plans that cost mostly over $60 per month. Also due to the price of smartphones, carriers can get us stuck to long term contracts to subsidize the price of smartphones.
Now I won’t dispute if $60 is worth the service or not. Being an owner of a smartphone, I do want data on my phone to use all the apps on it as well as calling and texting. So I won’t complain about that, however I would comment that there is one little feature that may disrupt the business of mobile carriers in the future. That little feature is an upcoming trend called video calling.
Today on our smartphones, a few apps allow us to video call our friends for free mostly in great quality video calls. They include skype, tango, fring, google talk, viber just to name a few. All you have to do is go on the app store and download these apps and add your friends so you can call them whenever they are online. An app like viber doesn’t even need you to be online, it runs in the background and with that whenever a viber contacts, you then receive the call that easily. No effort needed. That is really super cool and with more and more apps it won’t be too long before these apps should take a toll on mobile carriers’ dollars.
The reason why now they really don’t have weight against mobile carriers today, comes down to the number of people that have smartphones, the operating systems these phones use and also and mostly importantly the number of people that use these apps and have their friends using it.
It is said that now about 50% of the US population owns a smartphone. That is a great number however with differences in smartphones, they have different operating systems. If you have webOS or Symbian you will probably lack quality apps to allow you video call your friends however it is also true that most smartphones coming out these days is either in Android iOS or BBOS which do have quality video calling apps. As they number of smartphone owners increases it will give much more weight to video calling apps.
The main obstacle these apps are actually facing is the number of people using it and the number of friends they have using it. I personally have a few video chat apps on my phone and I really do lack contacts on them. For that reason I rarely use it. With more and more video calling apps coming out, it will fragment the members using it and thus you will never get enough contacts on one app to substitute your normal phone calls with calls using the app. If there could be 1 or 2 major players that could get enough following that most of your friends where using it, then that could become scarier to carriers. People won’t use their airtime minutes anymore and people reducing their plans drastically. Also if apps like viber allowed you to make cheap calls too, instead of only just allowing you to make free calls to your contacts, that would also be interesting. If google talk free calls could be on smartphones, that would be much more awesome (I have never understood why it’s not on the google talk app on phones)
The fact is that with time, in the next 2-3 years (even before) there will be a video calling app so awesome that most people will be using and most of your friends will be contacts on it so you could call them for free. When that time comes, what will mobile carriers do? Most of these apps also allow you to send free text messages as well to your contacts so people won’t need airtime minutes and texting anymore from carriers and we are talking about the short run. So plans that were $60 will turn to around $30 because phone users will only want data on their phones.
Then in the long run when wifi becomes available almost everywhere or video calling apps build their own data networks and allow us to use it, what will mobile carriers become then? Most people will drop the contracts and get phones and just install a video calling app that will allow them call their friends for free. If I were a CEO of a major mobile carrier, then I will start preparing backup plans for the future. The bright side for mobile carriers today, is the fact that one, they are the only one now that allows internet to be reached by most areas since their pass their data across the phone wires. Their second advantage is that there hasn’t been the killer video calling app that got a huge sizable member base that will allow most people to have most of their friends on it. However, it won’t be too long till these catch up on mobile carriers.