What is stopping FaceTime over 3G?

Mike Dano
With AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ) both charging on a per-MB basis for smartphone data, there is no longer any real reason to barricade Apple's (NASDAQ:AAPL) FaceTime service behind Wi-Fi. However, if FaceTime is indeed released to 3G, the market for mobile video calling still won't be much to celebrate.

Apple announced its FaceTime video calling service in conjunction with the launch of the iPhone 4 on June 7, 2010. Just five days before that, AT&T announced it would discontinue its unlimited smartphone data service in favor of a tiered pricing scenario where users were billed for the data they consumed. Neither company would give me details on the topic, but I'm guessing that AT&T initially balked at supporting FaceTime over 3G due to the burden it would put on the carrier's network. Indeed, AT&T's move to metered billing was an effort to curtail users' data traffic.

When Verizon Wireless began selling the iPhone 4 in February, many expected the nation's largest carrier to offer FaceTime over its 3G network. However, Verizon at the time of the iPhone 4 launch still offered unlimited smartphone data--and the ban on 3G FaceTime remained in place. Verizon referred questions on FaceTime to Apple, which declined to provide details.

But now that both Verizon and AT&T charge users for the MBs they consume, there is little reason for Apple to continue to lock FaceTime onto Wi-Fi. Moreover, there are a range of video-calling services that currently work over 3G, from Skype to Google Talk to fring, which means mobile video calling is both technically possible and supported by wireless carriers.

Thus, I expect Apple to open FaceTime to 3G when the company unveils its iPhone 5, likely in September for an early October release.

But 3G for FaceTime isn't the end of the video calling story--it's the beginning. Apple last year promised to make FaceTime an open standard, one that other companies could leverage to support cross-platform video-calling services. For example, the action could enable Skype users to call FaceTime users and vice versa. But Apple still has not opened up the FaceTime standard (a company spokeswoman declined to answer questions on the topic). Further, most other video-calling services also remain siloed.

A second and perhaps even more difficult problem to solve is the user experience for video calling. Currently, Skype, fring and other video calling vendors that provide services over 3G warn their users of possible data charges, but they do it in the small print--if at all. If video calling becomes a popular service, users (at least those on metered smartphone data plans) will need to be able to more effectively monitor how much data they're consuming in real time during a video call. For example, fring has warned that an hour of video calling uses 60 MB, which means that users on 200-300 MB entry-level data tiers could plow through their entire monthly data allotment in a matter of hours. This may be the real reason that Apple isn't pushing FaceTime onto 3G; the company is notoriously concerned with protecting users from unexpected charges and the vagaries of wireless billing.

If the iPhone 5 does usher in FaceTime on 3G, it could be a major step forward for the mobile video-calling market. But vendors and carriers still have a long way to go to make video calling a useful and reliable service. --+Mike Dano

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