That’s the story from Tony Glover at the UK’s The Business online:
Microsoft has developed a Skype-style free internet voice service for mobile phones that City analysts believe could wipe billions off the market value of operators such as Vodafone.
The service is included in a mobile version of Microsoft Office Communicator due to be released this year. It will take the form of a voice-over internet protocol (VoIP) application that allows Office users to make free voice calls over wi-fi enabled phones running Windows Mobile software. It uses the internet as a virtual phone network as well as accessing e-mail, PowerPoint and other Office applications.
Microsoft chief executive Steve Ballmer dropped his bombshell at the mobile operators’ annual 3GSM show in Barcelona last week. The significance of his remarks was missed because of his effusive and eccentric delivery.
Ouch! Ballmer demonstrated a VoIP call during the keynote and VoIP was also mentioned briefly in the press releases, but I guess it took a while for the implications to sink in.
Cyrus Mewawalla, an analyst at Westhall Capital, believes VoIP, when backed by Microsoft, will have a more devastating effect on mobile operators than it did on the fixed-line operators, which saw their voice revenues slashed after the introduction of VoIP services such as Skype.
“Internet voice does not even have to take market share to force traditional operators to cut their prices. The mere thought of free voice is enough to make customers push for price cuts,” said Mewawalla, predicting a bloodbath for mobile operator stocks.
More by following the link, but the initial effect may be limited by Office Communicator’s target business audience.
Update 2/20: Mark Odell and Kate Mackenzie from the Financial Times have more in Internet telephony set to go mobile:
“Internet voice is going mobile,” said Jorma Ollila, Nokia chief executive, on Monday as the world’s biggest maker of mobile handsets unveiled its first mass- market model capable of supporting voice-over-internet protocol. VoIP is the emerging technology that offers cheap calls to users by routing them over the internet, instead of traditional phone networks.
About a dozen large mobile operators are “actively” looking at offering VoIP-based services, according to one senior industry figure.
Microsoft is increasingly moving into mobile software and its Windows Mobile operating system already supports VoIP.
The latest version of software developed by Symbian, 48 per cent owned by Nokia and currently the biggest supplier of operating systems to high-end mobiles, will do the same.
As a stand-alone mobile operator, Vodafone is seen as being more exposed to the inevitable pricing pressure than some rivals.
However, the UK-based operator accepts it is inevitable. “We have to morph from where we are now,” said Arun Sarin, chief executive of Vodafone. “That [VoIP] is clearly a world around the corner . . . it is two to three years away.”
Those who were under the impression that Microsoft’s mobile phone involvement was only slightly more important than that with SPOT watches likely got a shock from all the 3GSM announcements this week. Andy Reinhardt puts it in perspective at BusinessWeek online in Microsoft’s Mobile Maneuver: The software giant may finally have figured out how to crack the wireless business:
Say this much for Microsoft: It never gives up. A decade after it started flogging a shrunken-down version of Windows for electronic devices other than PCs, the Redmond (Wash.)-based software titan is finally making a meaningful mark on the vibrant market for mobile phones.
A curious evolution has happened along the way, though. Sure, Microsoft (MSFT) is still urging handset makers to adopt mini-Windows — known today, after innumerable rebrandings, as Microsoft Windows Mobile 5.0 — as the core operating system for their phones. But now it’s chasing an even juicier prize: central position in a whole spectrum of mobile applications, from portable music, to wireless e-mail and messaging, to mobile TV.
In effect, Microsoft is trying to become the standard-setter and middleman for all the sexy new things people can do with their phones. “Microsoft has realized that, at the end of the day, it can’t make much money from selling operating systems for handsets,” says Ben Wood, senior mobile analyst for researcher Gartner, near London. “Instead, it’s now looking at an even bigger opportunity.”
They’d still like you to buy Windows Mobile 5.0, of course, to enable them to do all the “sexy new things.” Much more by following the link.
Unveiling a new TV service for mobile phones and a new unified communications solution for mobile devices, Microsoft Corp. Chief Executive Officer Steve Ballmer today introduced several innovative solutions and strategies that will generate more revenue opportunities for mobile operators and provide compelling benefits for subscribers.
As part of his keynote speech at 3GSM World Congress 2006, Ballmer announced the upcoming availability of Microsoft ® Office Communicator Mobile, which provides workers with the advantages of enterprise-grade, real-time collaboration capabilities for their mobile solutions. He also showed off a new live TV service introduced by Virgin Mobile and BT Movio powered by Microsoft for Windows Mobile ® -based Smartphones, and the new sync center for mobile devices in Windows Vista™, the new Windows ® operating system debuting later this year.
Ballmer also shared the first public demonstration of how Windows Live™, the recently introduced set of personal Internet services and software, will extend from the PC and Internet to mobile devices, and highlighted how leading mobile operators are using other innovative mobile services to attract new customers and build subscriber loyalty.
As part of the address, Ballmer highlighted the growth of Microsoft in the wireless industry over the past three years. The company has progressed from working with only one mobile operator in one country with one device-maker to 102 mobile operators in 55 countries with 47 device-makers overall today.
In addition, Microsoft shipped more than 6 million Windows Mobile-based connected devices in 2005, and expects the market to grow significantly.
Office Communicator is Microsoft’s instant messaging (and more) client for businesses and it merited a separate press release – Microsoft Office Communicator Goes Mobile. The mobile version will be available for download by users of Microsoft’s Live Communication Server within 60 days.
As for the TV service, we discussed the rumor yesterday and it seems to be as expected:
In the message Sir Richard announced that Virgin Mobile will be the first mobile operator to sign up for the new BT Movio broadcast digital TV and radio service, which is built with Windows Media technology and works with Windows Mobile-based Smartphones. This will make Virgin Mobile customers the first in Europe to have live digital TV on their mobile phones.
For Windows Live, there are now some new mobile members of the burgeoning brood and their kissing cousins at MSN:
Building on the investment in mobile search evidenced by the company’s recent acquisition of MotionBridge, Microsoft demonstrated Windows Live Mobile Search, including local search, which enables customers to quickly find what they need in the location they are searching. Windows Live Mail for Mobile was also demonstrated, which shares a common address book with Windows Live services for PCs and helps customers access and maintain the list of people they communicate with from the PC and mobile device.
With Windows Live services, Microsoft will help mobile operators realize new differentiation and monetization options through best-in-class mobile consumer services. The new Windows Live for Mobile model also provides developers and mobile operators with the ability to differentiate, innovate and bring solutions to market faster based on its open application programming interfaces (APIs).
Customers in several markets around the world can try the betas of mobile versions of Windows Live Mail, Messenger, Search and MSN ® Spaces by signing up at ideas.live.com or by going to http://mobile.live.com on their mobile browser. Windows Live Mail and Search betas for mobile are now available in key markets such as Australia, Brazil, Canada, China, France, Germany, Italy, Japan, Spain, the U.K. and the U.S. Also, Windows Live Local Search beta is now available in the United States and will go live in the in the U.K. on Feb. 15, 2006.
Finally, for Vista:
Ballmer also discussed new mobility enhancements for Windows Vista, the next version of the Windows client operating system launching in 2006. Demonstrating for the first time the Windows Mobile Device Center, Ballmer showed how Windows Vista will make it easier to connect Windows Mobile-powered devices to PCs, and enable synchronization of data, contacts, pictures, music and more.
The Windows Mobile Device Center works with the new Windows Vista Sync Center, which unifies the management of synchronization activities across Windows Mobile-based devices and the synchronization between other PCs and network file shares.
Marguerite Reardon at CNET:
Microsoft will soon announce a partnership with British Telecom Group and Virgin Mobile to launch a mobile TV service in the United Kingdom, a source close to Microsoft confirmed.
While BT and Virgin’s plans have already been disclosed, an announcement scheduled for Tuesday at the 3GSM World Conference in Barcelona will be the first time Microsoft’s affiliation with the service has been made public. Microsoft has been working for months with BT and Virgin Wireless to provide necessary software for packaging and viewing the TV content shown on mobile phones.
Microsoft also provides software to Verizon Wireless, which has been offering its Vcast TV service in the United States since early 2005.
Microsoft’s involvement with the BT Movio service is important because it’s yet another validation of the entire mobile TV market, say some analysts.
If it is like the Verizon deal, it means use of Windows Media for the video, but we’ll have to wait for the formal announcement to be sure.