Mobile's newest killer app: Voice

The newest multimedia services like mobile TV and Web browsing might get all the glory, but phone calls still offer plenty of opportunity.

Michal Lev-Ram, Business 2.0 Magazine writer-reporter

(Business 2.0 Magazine) -- Last month, when Steve Jobs unveiled the iPhone at the annual Macworld expo in San Francisco, he declared that the hyped-up handset's killer app would be "making calls."

With services like mobile television and Web browsing on the rise (and voice revenues in freefall), using a cell phone to talk doesn't sound very sexy, let alone profitable. And yet, the Apple (Charts) chief may not have been far off.

While exciting multimedia services like Verizon's (Charts) soon-to-be-launched live TV offering are promising, they're still very much in their infancy and aren't likely to attract paying subscribers beyond early adopters for several years. Meanwhile, basic communication services - voice and text messaging - still account for 90 percent of mobile operators' revenues, according to CTIA, a wireless trade group. And, luckily for the industry, there's still plenty of opportunity there.

"I think there's still a huge amount of potential in voice," says Joe Sipher, co-founder of Pinger, a San Jose-based company that lets users record and send instant voice messages, or "Pingers" that are delivered without ringing a person's phone. The service says it boasts the advantages of both email - messages can be scanned quickly and replies sent easily - with the more personal nature of voicemail. "The reality is that voicemail hasn't really been upgraded for the last 20 years."

Sipher won't disclose user numbers, but says subscriptions to Pinger, which are currently free, have been growing an average of 20 percent per week since the company launched last September. According to the company, the service is spreading virally and isn't dependent on carrier distribution.

But with active users sending out an average of 10 to 15 Pingers a week, you can imagine why a mobile operator could be interested in buying or licensing Pinger's technology. Like text messages, they could charge users for Pinger bundles (say, $5 a month for unlimited messages).

Buz Interactive is another startup experimenting with souped-up voicemail. Its service, which lets consumers mix music tracks into their voicemail messages, is currently free to beta users, but the company eventually plans to charge subscribers $1 to $3 per message.

San Ramon, Calif.-based Kodiak Networks, is already making money from voice services by selling push-to-talk solutions to operators like Cingular Wireless and Alltel (Charts). Just last month, the company launched new software that it claims will make group communication over cell phones easier to use. Among the upcoming services is a feature that lets users simultaneously send out a single voice message to multiple people (for example, to let a group of friends know which movie you're going to see without having to make six individual calls) and easy-to-use mobile conference calling (geared for business travelers).

"All operators are struggling for additional value-added services," says Bruce Lawler, a VP at Kodiak Networks. "We're challenging the conventional wisdom that there can be no more value-added voice revenues."

T-Mobile is also trying to innovate when it comes to old-fashioned phone calls. Later this year, the fourth-largest mobile operator will launch a service that lets users make calls over both traditional cellular and wireless Internet networks - letting mobile users talk over faster and cheaper Wi-Fi technology when they're close to a hotspot. T-Mobile is already testing the service, called HotSpot @ Home, in its home base of Seattle, where it's charging subscribers a flat rate of $20, on top of the regular cell phone plan, for unlimited Wi-Fi calls.

T-Mobile has a lot riding on dual-mode phones, since it doesn't have 3G (high-speed network) infrastructure, and can therefore only offer limited data services to its 25 million customers.

Of course, in the long run, it's likely carriers will need high-speed networks and the data services they enable in order to succeed in tomorrow's mobile arena. But that doesn't mean voice is dead - on the contrary, it's the most immediate financial opportunity in mobile, and carriers should milk it for all its worth.

And that's just what Apple's Jobs is doing. The new iPhone, slated for release this summer, will feature cutting edge design, music storage capabilities and Web access, but it will also include "visual voicemail," a new feature that lets users view and listen to messages in whatever order they want - kind of like email.

After all, the primary function of a cell phone is to communicate. Now that's revolutionary. Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.