Fact and Fiction

In today's New York Times reporter Brad Stone wrote about Apple and GoogleVoice writing (or having been edited):

And in recent weeks Apple rejected two of Google’s applications for the iPhone, including one for Google Voice, a service that allows people to make cheap international calls and send free text messages. The software could have hurt the business of Apple’s partner in the United States, AT&T, which subsidizes the cost of the iPhone and recoups that money through monthly charges.

If Stone is referring to the monthly charge that AT&T charges to customers GoogleVoice doesn't eat into that. You pay your monthly bill whether you consume the minutes or not. Reducing your minutes plan wouldn't help because each call made to GV or received from Google Voice is a minute consumed, and in the USA and Canada we pay for both calls made and calls received.

Here's why. When you make a call with GoogleVoice the minutes are actually consumed. While the calls are bridged together by GV, what AT&T would be losing is actually some or all of the reciprocal compensation that carriers pay one another in the form of soft dollar credits for minutes passed back and forth because Google has cut their own deals with carriers and routes the voice traffic over the least costly routes and uses a lot of their own pipe. The real loss that Stone omitted (or his editor cut it out) comes from two areas that GoogleVoice handles that would cut into carrier revenue the world over that are not monthly charges as much as they are incremental revenue buckets.

1) SMS is a major money maker for the carriers, especially the carriers outside of the USA. Since GV uses a third party to send, receive and forward SMS, but the contention a user would make is that GoogleVoice's SMS is really the equal to a premium SMS service as it does more, with archiving, plus web based access as a plus.

2) International long distance as the rates are far lower than AT&T's. In the EU rates are regulated. Call to the USA and the rates are not. Call the EU from the USA and the rates are high. GV cuts into that revenue stream.

Now comes the part that everyone has missed so far. It's not in the USA that GoogleVoice would do the most damage. It's in the international marketplace. Right now, you can't set up a foreign number to ring via GoogleVoice, but you can call them. That can easily be worked around by establishing a USA based SIP DID (ala what Gizmo offers) and forwarding that to your mobile phone. While you'll pay the international leg, and then the call termination leg, chances are it will be for far less money than using a local carrier if the call is not between EU countries.

No. The impact of the GoogleVoice app that would have been released wasn't harmful really to AT&T, as much as it would have been to Apple's other, more international calling based partners in my opinion.

Comments

[isolde100]

I agree the mainstream media has missed once again. The damage will be in the international market. I have one question. Explain how forwarded the US-based SIP DID works. I have a Gizmo number in the 415 area code. So what should I do now with Google Voice? Or do you mean forward my Amsterdam number to my Gizmo number?

I tried to set up my Amsterdam mobile number to ring to Google Voice and the "request was rejected". Sigh.