The cost of voice has never been cheaper. Are we approaching the point where stock voice will be free?
Before I begin, let me say the word “free” is loaded with danger. Free is a myth of marketing prose about 99.999 percent of the time, because someone somewhere – typically you -- is picking up the cost for service, be it Wi-Fi at Starbucks or the complementary shampoo and soap in your hotel room.
The PSTN was built with one goal, one purpose: to deliver narrowband voice. All other communications networks have evolved from single-purpose to multipurpose to IP-based networks delivering voice, video and data. More succinctly, the latest cable and cellular network technologies treat everything as data, with voice and real-time video requiring some quality of service. Video-on-demand and other streaming media can be buffered and tweaked to optimize the viewing and listening experience.
"Free" voice has been available for years via Skype (News - Alert) and the army of, "We're better than Skype" peer-to-peer over-the-top (OTT) services - making money from providing lower cost long-distance gateway services to the PSTN. Depending on the country and company, you can make a call for as little as a penny per minute.
Legacy carriers such as AT&T (News - Alert) and Verizon continue to search for angles to get rid of their existing analog copper-based services and the ticking time bomb of legacy switched telephony equipment. AT&T's approach seems too sales-based and legislative in nature, stirring up a conversation with policy makers to get some definitive guidance out of the Federal Communications Commission (FCC (News - Alert)). Verizon has taken more drastic measures, refusing to rebuild pockets of landline facilities wiped out by Hurricane Sandy and trying to force an inferior wireless replacement as a substitute.
Verizon ultimately bowed to public pressure and is installing FiOS (News - Alert) in some of the affected areas, but it continues to make noises about how unreliable its existing copper plant is in other markets. "Free" installation of FiOS is its latest hook to get out from under existing copper voice connections. I suspect in the not-too-distant future, any Verizon (News - Alert) customer registering a complaint on a copper-based service will get FiOS if it is available.
Cable companies are rolling out their fourth or fifth generation of end-user hardware these days, boasting multi-gigabit speeds under DOCSIS 3.1 to deliver everything. Video and data continue to be cornerstones of service, but operators have found the much vaunted triple play has lost ground due to cord-cutters ditching landline voice in favor of a cell phone.
I look to Google and other like-minded alternative fiber broadband providers to offer an IP-based voice service for "free" at some point in the future, where "Free" is muddled by various per-month or per-year fees to maintain 911 service and other local regulatory requirements. "Free" in this case will be defined as unlimited local and long-distance voice services within the U.S. and some/most territories, with customers responsible for picking up the appropriate CAT-iq 2.0 wireless phone hardware compatible with the service gateway.
"Free" will also apply to basic voicemail and speech-to-text visual voicemail services in this world. Google already provides gigs of disk space for free and speech-to-text is what personal assistant services do as a part of "free" voice searches today.
Cable companies could follow suit, bundling in landline voice for "free" to sway customers from moving to phone company broadband bundles. Traditional phone companies would be the last to offer "free" voice, since making money from consumer voice is embedded within their DNA and they still have to deal with all that pesky copper and regulation.
In a world of "free," how does anyone make money from voice? That's a topic for another day, but the short answer is value-added services provide the best hope for future profits.