Why lower international cell call rates are a threat to VoIP

The emergence of discount international cellular calling plans could render cell a serious competitor to VoIP.Let me make my point by laying out the morphing competitive landscape.

The emergence of discount international cellular calling plans could render cell a serious competitor to VoIP.

Let me make my point by laying out the morphing competitive landscape. 

One of the big appeals of VoIP calling plans over landline has been the fact that if you make international calls, you'll save substantial amounts of money over your landline's international calling rates.

One of the big appeals of cellular calling plans over landline has been the fact that if you make a lot of domestic calls, the decline domestic cell call rates means you'll save substantial amounts of money over your landline's domestic calling rates.

Because of these two factors, an increasing number of people have cell and VoIP lines- but no land lines. For the record, I am one of those people. 

Now, in today's Wall Street Journal Online, there's a report that overseas cell call rates are getting cheaper. "In some cases, it is now cheaper to call overseas on a cellphone than a land line," writes the WSJ's Sarmad Ali.

The big enabler in this trend, Ali writes,are "discount plans where customers pay an average of $4 a month for access to less-expensive per-minute rates on the calls. In general, even if you only make a few international calls every month, the monthly fee option quickly pays for itself."

Ali cites two examples:


A $3.99 a month International Long Distance Value Plan from Verizon Wireless, which, for example, prices calls from the U..S. to London at 20 cents a minute, compared to the regular $1.49 a minute, and;

A $4 a month Sprint PCS International Plan, with six cents a minute calls to the U.K., compared to the regular 49 cents a minute tag.

Think that's something?  A no-extra-fee monthly plan from AwakeTel prices cell calls to the U.K. at six cents a minute. 

"So what's the (literally) big deal," you may ask. "International VoIP calling is still substantially cheaper than even the most attractive international cell calling plans." 

True, I say. You can, for example, call London via Vonage for three cents a minute.

But think about it. Three cents a minute is a huge advantage over 49 cents a minute, or $1.49 cents a minute. But say you are not a VoIP user yet. You already make some, if not all, of your domestic calls over cell,but are  primarily interested in signing up for VoIP because you make a lot of international calls.

The key question you might be asking yourself is, whether signing up for a VoIP service, paying $24.99 a month, and then making international calls at three cents a minute is a better deal than just sticking with cell, forking over an additional $4 a month (if that) and calling select destinations for six cents a minute.

There are millions of fence-sitter "should I or should I not VoIP" folks out there who might look at this new international cellular calling plan math and be that much harder to convince that they should sign up for VoIP.

That's why I believe that fighting discounted international cellular calling plans will be a challenge for VoIP marketers going forward.