AT&T to Allow Skype and Google Voice to Operate on Its Mobile Network?

[Taximan]

AT&T adds fav 5

AT&T has matched the fav 5 list they call it A list it is on their site. Just registered so I am using google voice as one of my 5 free calls now all incoming calls are free. They have accepted it so we'll see if it works. I am using the GV number for business calls and random people. Great way to save minutes.

 

[mwg]

Looking forward to this...

My wife (who is a foreigner) would be able to call home from anywhere (with 3G coverage of course) without using minutes or a international calling card.

 

[techwarrior]

Problem is, AT&T doesn't have 50 MILLION customers paying $30/month for data. AT&T only has 80 million customers total. No way 62% of AT&T's customers has a $30 data plan.

Don't forget the Crackberry and 3G phone users as well as iPhones. Clearly, 62% with $30 plans is not likely, but 62% with some form of data plan may not be too far off. Plus, investments with 2-3 year returns would not be uncommon given the long term revenue stream such an investment could generate for T.

 

[jb510]

THANK YOU.

how many people need to state this before people start to understand it?

do that few people actually have Google Voice accounts in that a wide swath of people still believe it's some sort of VOIP system?

Well apparently more... because GV IS A VOIP SYSTEM and not a new one.

This isn't really the venue for the discussion, just because your call originates and terminates on the PSTN doesn't mean it isn't carried by VOIP between those endpoints, which is exactly what Google does and this is why they can undercut the pricing of those relying on just the PSTN network.

This is nothing new, many international and some domestic long distance providers have done this for about a decade. Those providers often relied on a similar automatic call back system to originate the call, where you called into a local number and told them who you wanted to call, they then bridged the two calls. Google has just added a web interface to initiate those types of calls.

 

[jb510]

Calls on Google Voice are free (as long as they are not international), which is different from VOIP services.

Actually no... Google Voice doesn't offer free calls to AK and HI as well as many small localities. This become rather controversial recently when AT&T (throwing out a red herring) suggest GV be required to abide by common carrier provisions:

http://googlepublicpolicy.blogspot.com/2009/09/response-to-at-letter-to-fcc-on-google.html

 

[rnauman821]

Don't forget the Crackberry and 3G phone users as well as iPhones. Clearly, 62% with $30 plans is not likely, but 62% with some form of data plan may not be too far off. Plus, investments with 2-3 year returns would not be uncommon given the long term revenue stream such an investment could generate for T.

I guarantee that at least 75% have some form of a texting plan. Texts cost them nothing and is pure profit. Maybe they will use the butter we have been providing them for something useful for a change.

 

[jb510]

Alright I seem to be on "Tin Foil Hat Patrol" today... and I thought I was done, but this is particularly stupid so I had to respond.

<clip>
How much money is Google investing in infrastructure?? Gee! ZERO!!!

Actually billions... Google pays for it's side of bandwidth, it's not like get to hook up to the internet for free. Further the service THEY provide causes users like ME to buy internet service on the other end which is then rolled into infrastructure as well.

How much money is Netflix investing in Infrastructure?? Gee! ZERO!!

Right because they get free postage right? They're investing at least millions in postage... As for streaming, once again they are paying for THEIR internet connection in addition to creating a service that encourages consumers to pay for the other end of the connection

How about Skype? Let me guess ZERO!!!

Once again... Skype is outlaying money for THIER side of the bandwidth they use in addition to fostering use and purchasing of bandwidth on the other side...

Is this getting repetative now?

But they think they can all hog bandwidth for free and make money while communications companies are investing billions on data networks. Verizon, AT&T etc. spend a fortune laying the optical fibre lines and connecting homes to the Internet. The money that we pay these companies for Broadband service whatever it is $20-$30 a month nowhere near covers the costs if everybody starts hogging bandwidth. The same people will complain that the network is slow. Gee I wonder why the network is slow?? No matter how much bandwidth these companies add there will be ever increasing demand because the likes of Google will use this bandwidth for free and make a fortune. This can only be sustained for so long. NetNeutrality will only result in us going back to the stone age and progress will come to a standstill. But everything will be FREE!!!

Where do you think those backbone builders and providers get that money for captial improvements? Seriously?

Look, presently I have a contract with my ISP in which I agree to pay $34/month and they are to provide UNLIMITED data at 3Mbps/768Kbps. If they want to change the terms of that contract next time I renew it then that's fine with me. If they want to discourage me from using as much data as a can squeeze through then I'd particularly like them to offer me a discounted plan that caps data to 25GB per month...

It's not my fault they decided to create a business model around marketing unlimited volume data plans.

 

[iphones4evry1]

AT&T makes the bulk of their income from the fixed minimum $79.99 per month that it charges us. The revenue they get from long-distance calls pales in comparison. It would be a great publicity move for AT&T to allow Skype.

 

[Rodimus Prime]

Well apparently more... because GV IS A VOIP SYSTEM and not a new one.

This isn't really the venue for the discussion, just because your call originates and terminates on the PSTN doesn't mean it isn't carried by VOIP between those endpoints, which is exactly what Google does and this is why they can undercut the pricing of those relying on just the PSTN network.

This is nothing new, many international and some domestic long distance providers have done this for about a decade. Those providers often relied on a similar automatic call back system to originate the call, where you called into a local number and told them who you wanted to call, they then bridged the two calls. Google has just added a web interface to initiate those types of calls.

Well you have a lot of learn about the telephone industry.
By the standards you just described all the phone calls we make are VOIP. Telephone companies for years have been taking calls on there network and sending them over the internet to another place.

The VOIP technology was pioneered by MCI but it moved into the backbone of the telephone network were almost all calls were being router over IP.

GV my be part VOIP but the part were minutes get charged it is exactly like a normal phone and not over IP.

Think of Google voice more as a bridge between other numbers.

 

[skwoytek]

I'm not going to argue about the infrastructure costs for VOIP providers, because you are correct.

However, when it comes to Google Voice, you don't need broadband unless you're using a VOIP client like Skype. Googles system operates just as many communications companies do - they send portions of the voice call over the internet. Google voice requires a data connection for setup and initiating calls only.

In this way, Google does not affect AT&T's data network like Skype does. And Apple is holding up Google Voice, not AT&T. Apple doesn't like the way Google Voice obfuscates calling features via iPhone.

 

[hotzenplotz]

Fair and square until you start dropping minutes and start using Skype and using up too much bandwidth. When we have enough people doing this that is when we will have a problem.

Dropping minutes is already a reality on ATT, so your point is mute.

As of April '09, ATT had over 1.6 million iPhone users. Some rough math would suggest $96 million in charges from only the iPhone crowd - a month! The quarter ending in April of 09 saw a $3.13 BILLION profit (down from about $3.5). "Oh, but look, we're expanding our network so we can have MMS on the iPhone". How pathetic.

The whole voice+data setup is a scam; your voice travels over fiber/the net to the next tower in bits and bytes.

 

[aristobrat]

The whole voice+data setup is a scam; your voice travels over fiber/the net to the next tower in bits and bytes.

In the terms of VoIP, yeah, but when it comes to you making a voice call vs you streaming Pandora, one of them uses a whole lot more "bits and bytes" (and its not the voice call).

 

[Almy]

I'm not sure this really matters right now. Carriers like AT&T aren't offering data only plans. And until they do you'll have to at least pay for minimum minute plans in order to also get the data plan to use skype over IP. Pretty toothless IMO.

 

[aristobrat]

I'm not sure this really matters right now. Carriers like AT&T aren't offering data only plans. And until they do you'll have to at least pay for minimum minute plans in order to also get the data plan to use skype over IP. Pretty toothless IMO.

AFAIK, all carriers have data-only plans.

Here's AT&Ts for Smartphones:
http://www.wireless.att.com/cell-ph...s/data-cell-phone-plans.jsp?_requestid=295942

At the bottom of each column is a "Data Only" option.

I'm sure they won't let an iPhone qualify for this, but the other smartphones should...

 

[thecypher]

Alright I seem to be on "Tin Foil Hat Patrol" today... and I thought I was done, but this is particularly stupid so I had to respond.


Actually billions... Google pays for it's side of bandwidth, it's not like get to hook up to the internet for free. Further the service THEY provide causes users like ME to buy internet service on the other end which is then rolled into infrastructure as well.


Right because they get free postage right? They're investing at least millions in postage... As for streaming, once again they are paying for THEIR internet connection in addition to creating a service that encourages consumers to pay for the other end of the connection


Once again... Skype is outlaying money for THIER side of the bandwidth they use in addition to fostering use and purchasing of bandwidth on the other side...

Is this getting repetative now?




Where do you think those backbone builders and providers get that money for captial improvements? Seriously?

Look, presently I have a contract with my ISP in which I agree to pay $34/month and they are to provide UNLIMITED data at 3Mbps/768Kbps. If they want to change the terms of that contract next time I renew it then that's fine with me. If they want to discourage me from using as much data as a can squeeze through then I'd particularly like them to offer me a discounted plan that caps data to 25GB per month...

It's not my fault they decided to create a business model around marketing unlimited volume data plans.

Perhaps you are failing to see that "their side" is only from "their" datacenter to the backbone. That is like paying for gas for just the 1st mile of a 1000 mile long journey. Who is paying for the remaining 999 miles??? Or like paying for paving a little side road from your house to the freeway. Who pays for the freeway?? Your ISP also pays for its 1st mile to get to the backbone. Assuming it is a mom and pop ISP and not a large carrier who actually owns and operates the network. Does Google pay for the backbone, the under sea cables that connect continents, the communication satellites that carry data traffic across the world?? Nobody is saying the backbone builders are building the backbones out of the generosity of their hearts. The point is if this trend continues they will stop building backbones because they will only lose money by building them while companies like Google make money by hogging majority of the infrastructure without spending a dime on it. And then how are you going to access your favorite Google apps?? We all know unlimited is not really unlimited because there is only a finite amount of something. If everybody starts using unlimited in the true sense it is simply not going to work. Of course it can be argued then why it is the case that they advertise unlimited. But that is futile because it doesn't help anybody or change the facts. It is just a matter of time before we will all be capped on our usage. The carriers are already doing usage based broadband trials in the US. Stay tuned.

 

[xhambonex]

Perhaps you are failing to see that "their side" is only from "their" datacenter to the backbone. That is like paying for gas for just the 1st mile of a 1000 mile long journey. Who is paying for the remaining 999 miles??? Or like paying for paving a little side road from your house to the freeway. Who pays for the freeway?? Your ISP also pays for its 1st mile to get to the backbone. Assuming it is a mom and pop ISP and not a large carrier who actually owns and operates the network. Does Google pay for the backbone, the under sea cables that connect continents, the communication satellites that carry data traffic across the world?? Nobody is saying the backbone builders are building the backbones out of the generosity of their hearts. The point is if this trend continues they will stop building backbones because they will only lose money by building them while companies like Google make money by hogging majority of the infrastructure without spending a dime on it. And then how are you going to access your favorite Google apps?? We all know unlimited is not really unlimited because there is only a finite amount of something. If everybody starts using unlimited in the true sense it is simply not going to work. Of course it can be argued then why it is the case that they advertise unlimited. But that is futile because it doesn't help anybody or change the facts. It is just a matter of time before we will all be capped on our usage. The carriers are already doing usage based broadband trials in the US. Stay tuned.

So you don't think when it gets to that point the pricing structure or however any of this crap gets paid for will have changed?

Sure someone's got to build it and pay for it, but that doesn't mean things can't be changed around so we, or whoever does have to pay for it.

You know way more than I do, it just seems like if they continue to go this way then things will have to be changed around...

 

[125037]

It amazes me how smart people sometimes don't realize that nothing in life is free. Everybody wants free Internet, free phone service, free TV, free this, free that. Who pays for the infrastructure? Which business invests money into something if it is not going to make profit on it and it is expected to just give it away for free? No business can make money giving stuff away. We all saw that in the big dotcom bubble bust. All the wonderful give everything away business models. But people still think that they are doing a great thing by dropping their voice plan minutes and using their unlimited data plan to make free voip calls. Gee! when we have enough people doing this your free voip calls aren't going to work either.

How much money is Google investing in infrastructure?? Gee! ZERO!!! How much money is Netflix investing in Infrastructure?? Gee! ZERO!! How about Skype? Let me guess ZERO!!! But they think they can all hog bandwidth for free and make money while communications companies are investing billions on data networks. Verizon, AT&T etc. spend a fortune laying the optical fibre lines and connecting homes to the Internet. The money that we pay these companies for Broadband service whatever it is $20-$30 a month nowhere near covers the costs if everybody starts hogging bandwidth. The same people will complain that the network is slow. Gee I wonder why the network is slow?? No matter how much bandwidth these companies add there will be ever increasing demand because the likes of Google will use this bandwidth for free and make a fortune. This can only be sustained for so long. NetNeutrality will only result in us going back to the stone age and progress will come to a standstill. But everything will be FREE!!!

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[goosnarrggh]

Once again... Skype is outlaying money for THIER side of the bandwidth they use in addition to fostering use and purchasing of bandwidth on the other side...

Skype-to-Skype calls are peer-to-peer, and the bits-n-bytes associated with the voice calls do not go through Skype's data centres. So it's the sending and receiving customers (and all other intermediate nodes in between) who are paying for their share of the bandwidth involved by paying their ISPs' service fees. Then their ISPs, in turn, pay for their wholesale usage of the Internet backbones through their service fees paid to the backbone providers.

Skype-to-PSTN and PSTN-to-Skype calls do go through Skype's data centres, so both Skype and the caller are contributing their share to the cost of the bandwidth involved.

If the backbone providers are undercharging for the value provided by the backbone, then that's the backbone providers' responsibility, not the customers who make use of the advertised service. If the backbone providers really aren't getting paid enough money to sustain the continued operation and growth of the Internet, then personally, I would welcome a revolution in pricing whereby they are compensated justly.

As an aside, if we look at AT&T Wireless's infrastructure as an independent business unit from AT&T's investment in the fibre optic Internet backbone (which is exactly the way the FCC requires them to operate), then the portion of a Google Voice call that AT&T Wireless experiences really is purely PSTN. AT&T Wireless would experience significantly more burden from a over-the-air ViOP service like Skype than it would from an over-the-air PSTN (albeit backbone VoIP, but not necessarily travelling over any AT&T-owned backbone) service like Google Voice.

 

[3D0G]

AT&T being the exclusive provider

I would like to get an iPhone, but I haven't yet because of Apple's exclusive arrangement with AT&T--I don't want to support a company that knowingly broke laws to spy on Americans in collaboration with the Bush Administration.

Well, I guess I'll have to wait another year or two...I'm sure eventually Apple will open it up to other providers.

 

[Rocketman]

Here's some business advise for AT&T. People want to use 3G where they can't get other internet access, and soon they will want LTE. AT&T networks will not be able to handle true laptop wireless speeds until LTE is deployed. These are facts. People wanting broadband, tethering, VoIP and HD streaming video notwithstanding.

AT&T should have a "family plan" for devices. For each iPhone plan one can add-on tethering or a wireless access device to a laptop for a small additional fee on the theory only one can typically be used at once.

If a family has 4 iPhones, 4 iPhone data plans and up to 4 add-on plans.

AT&T needs revenue, albiet at a more moderate rate than now so people don't simply revolt. People want VoIP and tethering so when they NEED a critical email, they can get it.

Can't AT&T offer a Firefox plug-in that reduces feed resolution and thus bandwidth when on 3G?

AT&T needs to keep customers for the LTE rollout when things get real.

Rocketman

 

[53buick]

Tethering (rather, the lack thereof) is my biggest complaint by far.

i'm with ya. i'm willing to pay a little extra. i don't care, i just want access.

 

[Rodimus Prime]

AFAIK, all carriers have data-only plans.

Here's AT&Ts for Smartphones:
http://www.wireless.att.com/cell-ph...s/data-cell-phone-plans.jsp?_requestid=295942

At the bottom of each column is a "Data Only" option.

I'm sure they won't let an iPhone qualify for this, but the other smartphones should...

they allow it for all other smart phones other than the iPhone.

I completely understanding them saying no to the iPhone on it considering they have to pay Apple $400 for each iPhone. At the $35 a month off data they only get $835 and of that 835 I bet all the profit for ATT is in that $150 difference in subsidize

 

[AtlasBoy]

AT&T Profits

There has been a lot of discussion here about how AT&T pays for it's infrastructure and how much it costs. I'm not going to debate any of that, but I will say that for 2008, their income (profit) was $19,903B (yes Billion) before tax and $12,867B after tax (link below). Granted this was from all sources of revenue - not just wireless - so they do have some $$$ they can put into infrastructure. I've seen it reported that they plan to put $18B into their network which is a good thing because it's really needed IMHO. What's unclear to me is the timeframe that this $18b upgrade will be done. Is it this year, the next 2 years, over three years? Does anyone know?

http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?symbol=t

 

[Rocketman]

There has been a lot of discussion here about how AT&T pays for it's infrastructure and how much it costs. I'm not going to debate any of that, but I will say that for 2008, their income (profit) was $19,903B (yes Billion) before tax and $12,867B after tax (link below). Granted this was from all sources of revenue - not just wireless - so they do have some $$$ they can put into infrastructure. I've seen it reported that they plan to put $18B into their network which is a good thing because it's really needed IMHO. What's unclear to me is the timeframe that this $18b upgrade will be done. Is it this year, the next 2 years, over three years? Does anyone know?

http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?symbol=t

It's about a 2+ year build-out period for that $18B.
They committed a large sum last year and the year before that as well.

The $12B net profit is after infrastructure improvement. Since they have a roughly 20% gross margin in the corporation, that means 80% of gross covers expansion, labor, taxes, overhead, R&D, etc., etc.

The figure I find notable is this particular unit, wireless, is committing $18B this year to expansion and is receiving gross revenue of about that same figure, or less. For that to make sense with a 20% margin they clearly expect future revenue to provide a profit margin.

VoIP, tethering and Sling Player ought to kill that!

EDGE had/has a useful life of over 10 years. 3G is likely to almost get there. LTE (4G) is designed to morph over time so it is more akin to OSX with occasional software upgrades so the useful life gets closer to 15 years.

I have had houses far older than that. They didn't cost billions of dollars either. It takes chutzpah to invest in this industry.

Rocketman

 

[AtlasBoy]

It's about a 2+ year build-out period for that $18B.
They committed a large sum last year and the year before that as well.

The $12B net profit is after infrastructure improvement. Since they have a roughly 20% gross margin in the corporation, that means 80% of gross covers expansion, labor, taxes, overhead, R&D, etc., etc.

The figure I find notable is this particular unit, wireless, is committing $18B this year to expansion and is receiving gross revenue of about that same figure, or less. For that to make sense with a 20% margin they clearly expect future revenue to provide a profit margin.

VoIP, tethering and Sling Player ought to kill that!

EDGE had/has a useful life of over 10 years. 3G is likely to almost get there. LTE (4G) is designed to morph over time so it is more akin to OSX with occasional software upgrades so the useful life gets closer to 15 years.

I have had houses far older than that. They didn't cost billions of dollars either. It takes chutzpah to invest in this industry.

Rocketman

Thanks for the info Rocket. I noticed that too. When I looked at the 10K for the quarter ended 6/30 (the latest numbers filed with the SEC), the wireless business post tax income is about the same compared to Q2 2008. They must be expecting higher % profit margins sometime this year, but half way through the year it does not seem to be happening. They do however have more cash on hand (7.3B vs 1.6B last year).

We'll see where this all goes. I'm happy that the network is opening up to more types of traffic (I really want tethering), but I do wonder at what cost to us customers. I think adding VoIP could make things MUCH worse than we have it today unless ATT does something quickly - which ain't gonna happen IMHO. I guess we'll know soon.