Google Voice is calling, but will wireless carriers answer?

Google yesterday released BlackBerry and Android applications that support its still-in-testing Voice service. Although the news is relatively minor in the grand scheme of things, the actions highlight a number of important and potentially serious issues in the wireless industry--including what appears to be the growing sentiment that wireless carriers are in serious threat of becoming dumb pipes.

First things first: What is Google Voice? Google acquired GrandCentral in 2007 for a rumored $50 million and turned it into Google Voice, a service that is currently only open by invitation (presumably so Google can monitor usage and add capacity as necessary). The service essentially directs your calls and text messages through a single phone number provided by Google Voice. It also offers a number of interesting voice-based services, including:

  • The ability to route incoming calls to various (and multiple) phones, as well as manage those calls based on the caller's number
  • Get transcripts of voicemails
  • Record calls while they're in progress, and then access them online

Now, none of these services is revolutionary when compared with similar plays by other VoIP providers, but what's interesting is Google's application of them in mobile.

Consider: Via the Android or BlackBerry Google Voice applications, you can place international calls through your local Google Voice number and pay Google's international rates instead of those from your wireless carrier--and you can do it all from your phone's established address book. Even more worrisome, it seems users can route all their mobile calls through their Google Voice number, which creates a potentially serious situation for those carriers that offer unlimited calling to select numbers (such as T-Mobile USA's MyFaves or Verizon Wireless' recently introduced "Friends & Family"). Indeed, CrackBerry.com users appear to have already begun using this setup, according to this thread, thereby effectively obtaining unlimited calling without the hassle of actually paying for it.

I called up Verizon Wireless and T-Mobile for comment on this issue, and neither was able to immediately provide a response, but they likely won't be happy. Wired is already speculating that a Google Voice iPhone app--which is expected but not yet announced--would be quashed by AT&T since the service might eliminate the need to pay AT&T for text messages.

Google Voice highlights what I think are some very important developments. First, the voice services provided by wireless carriers are archaic when compared with Google Voice and other VoIP-based offerings. I mean, I still have to "press 1" to listen to my voicemails, while Google Voice users are getting transcripts of theirs. And I can't think of any wireless carrier that offers call routing of any kind, much less a service that can be managed based on the identity of the caller.

But what makes this all the more remarkable is Google's widespread activity on the mobile front. The company already offers a mobile phone operating system--Android--that enjoys support from a broad range of handset makers. And the company's mobile applications, including maps and search, are must-haves for many smartphone users. Add a comprehensive management system for voice calling and what need is there for a carrier, other than transport?

GigaOm's Om Malik flatly states that "the Google Voice app essentially reduces the cell phone carrier to a dumb pipe." And his assertion involves a voice-based service, not a high-end, data-centric one (where many of the dumb pipe arguments typically reside).

Google Voice--both the application's potential and the company backing it--should give entrenched wireless operators pause. They've based their businesses on providing voice calling to millions, and if they can't at least stay on top of the innovations in that segment, what hope do they have of remaining relevant in a mobile broadband future? --Mike

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