O2 tries out free VoIP calls for iPhone and Android

O2 has begun a trial VoIP service, which it may launch as a commercial product next year, if the pilot goes to plan.

O2 has announced O2 Connect, an app for iPhone and Android that lets people make VoIP calls from their handsets. Photo credit: O2

The operator announced O2 Connect, which allows iPhone and Android handset owners to call landlines and mobile phones for free, on Wednesday. For now, the invite-only service relies on the user downloading the Connect app and finding a Wi-Fi hotspot. O2 said it could eventually make the Connect app available to smartphone users who subscribe to rival networks.

"It's potentially a great way for us to get ourselves and our brand in front of people who aren't necessarily our customers," an O2 spokesman told ZDNet UK, stressing the decision will depend on how the trial goes.

The beta scheme will involve a limited set of around 1,000 O2 consumer and business customers. Although the app is only available for iOS and Android for now, O2 said it will "subsequently roll out to other devices".

O2 Connect is a brainchild of O2 Labs and the London-based Digital department, opened in September, of parent company Telefonica. According to O2's spokesman, its genesis can be found in Telefonica's purchase of VoIP firm Jajah in 2009.

"From a traditional telecoms company's view, you either see VoIP as a threat, or you think about how you work with it and take advantage of it," the spokesman said, suggesting it is better for O2 to get into VoIP itself rather than see its customers "go off with other providers".

The VoIP threat

The move comes at a time when traditional operators are seeing voice and SMS revenues in steady decline. This is largely because customers are doing more and more communicating over data networks, using these for both non voice-centric communications and IP-based voice services.

Some operators counter the VoIP threat by blocking such services, but such attitudes are coming under increased regulatory scrutiny. Carriers such as T-Mobile, with its Bobsled app, have recently started to get into the VoIP game themselves, in a way that allows them to serve customers on both smartphones and desktops.

According to independent telecoms analyst Ian Fogg, O2 may also be motivated by a desire to get a better understanding of IP-based voice communications, ahead of the switch to '4G' LTE. LTE is all IP-based, effectively making voice just another internet application rather than a discrete service.

"At some point over the coming years, when LTE technology arrives, the goal is to switch from circuit-switched voice to VoIP-type technology, and that will be something that telecoms companies will be behind," Fogg told ZDNet UK. "That won't happen in the UK for years, [but] VoIP is coming in a bigger way than it is today."

Fogg added there are other benefits of offloading voice services to local broadband connections, such as improvements in connectivity where Wi-Fi is available but mobile coverage is not. However, he noted that femtocells offer much the same functionality without the need to switch to Wi-Fi, and for O2 the trial is more likely to be "about understanding the technology and exploring the market".