O2 embraces VoIP to offer a fair price on international calls

THE INEVITABLE has happened with mobile operator O2 embracing voice over IP (VoIP) to offer its customers cheaper international calls.

Mobile operators have traditionally disdained VoIP technology as it threatens to undermine their business model of charging lots of cash to use their networks. Now O2 has done the right thing and provided details of its International Favourites package, which uses VoIP to offer punters a surprisingly good deal on international calls.

The INQUIRER reported that O2 had plans to put its investment in VoIP firm Jajah to good use and now the mobile operator has announced that for £10 a month customers can get 3,000 minutes to three international landline numbers and for £20 they can get 3,000 landline minutes and 200 mobile minutes to five international numbers.

Aside from outgoing calls, O2 will also provide punters who sign up for the 'bolt-on' a local phone number in one of 42 countries that redirects to their UK O2 mobile. That means users on the other side can phone and incur only local call charges. The only downside is that O2 provides only one local number, so unless your international mates are all in one country, you're going to have to pick which is your favourite.

The deal compares pretty favourably against VoIP provides such as Skype and it needs to, given the growth of VoIP services. While questions remain as to what percentage of call minutes on Skype are to actual phone numbers, there is little doubt that users are flocking to the technology as a means of avoiding phone operators' charges.

One of Skype's main competitors, Nimbuzz, announced that it had managed to rack up 3.65 billion voice minutes on clients running on mobile phones with over 30 million users registered. The firm were not willing to disclose what percentage of that 3.65 billion minutes were to registered lines, though for mobile operators, figures like that are sure to send chills down their corporate spines.

O2 says that its International Favourites package offers a "compelling alternative" to what it terms "Internet-based calling services". It claims that, "Unlike these services, which often tie customers to their computers, International Favourites offers the added convenience of staying in touch with friends and family abroad using a high quality connection through their mobile phone."

The problem for O2 is that VoIP services such as Skype, Nimbuzz and Fring do not tie users to their computers anymore, with clients available on many popular mobile phone operating systems. Nimbuzz said that it has recorded 150 million downloads of its client since May 2008 and it would be reasonable to assume that Skype has had even greater success.

Every call minute that is routed through networks such as Skype and Nimbuzz means a loss of revenue for O2, especially if it is over WiFi. Now it seems that the firm has decided to take a share of something rather than having the whole of nothing by embracing VoIP and actually putting together a pretty decent deal.

O2 says that its International Favourites package will be available to O2 pay monthly, pay-as-you-go and small business customers from 26 October. µ