AT&T is letting voice communication via Internet applications on the iPhone to run on the carrier?s 3G network. Industry players are questioning whether AT&T will benefit from this policy change.

In the past, VoIP applications were only enabled for Wi-Fi connectivity only. AT&T has offered several other devices that enable VoIP application on their 3G, 2G and Wi-Fi networks.

?[In an August letter to the Federal Communications Commission] we said that we would be taking a fresh look at extending VoIP apps on iPhone to our 3G network,? said Michael Balmoris, spokesman at AT&T, Washington.

In the letter from James Cicconi, senior executive vice president of external and legal affairs at AT&T Services Inc. to Ruth Milkman of the FCC, Mr. Cicconi insisted AT&T had nothing to with Apple?s removal of Google Voice from the Apple App Store (see story).

Mr. Cicconi said AT&T was not asked about the application by Apple at any time, nor did it offer any opinion.

AT&T does not block its other devices on its network from making voice over Internet calls.

?IPhone is an innovative device that dramatically changed the game in wireless when it was introduced just two years ago,? said Ralph de la Vega, president and CEO, AT&T Mobility & Consumer Markets, in a statement yesterday. ?Today?s decision was made after evaluating our customers? expectations and use of the device compared to dozens of others we offer.?

And the winner is...
While consumers do win when it comes to AT&T?s policy reversal for the iPhone, AT&T may suffer.

Patrick Mork, vice president of marketing at GetJar, London, said the change may not benefit AT&T.

Mr. Mork said that VoIP applications are some of the most popular offerings from GetJar, a mobile application developer and distributor, because it allows for easy contact with, especially for consumers with relatives overseas.

?I?m not sure it?s in the best interest of AT&T, but it?s in the best interest of consumers,? Mr. Mork said. ?It?s extremely critical because there has been a lot of consumer demand for these kinds of things, and AT&T realized that.

?They probably ran the numbers and hopefully stand to gain more consumers buying data plans, this is probably a break even deal for AT&T, but the consumers are the winner,? he said.

AT&T?s announcement comes on the heels of the Verizon Wireless and Google partnership.

Verizon Wireless and Google partnered to leverage the carrier?s network and the Android open platform to deliver mobile applications, services and devices to customers. Both companies view this agreement as an opportunity to offer consumers an array of products (see story).

Mr. Mork said the announcement does benefit AT&T from a competitive position, by showing the wireless carrier as trying to be more open like its rivals, and openness is what consumers expect with mobile content.

?If carriers are going to be successful in content, they need to offer the best selection of products, even if it conflicts with their services,? Mr. Mork said. ?Right now content is one of the top four factors U.S. consumers look for when they pick a wireless device, it trumps things like touch screens or whether the phone has a music player, consumers want content and expect carriers to be first point of reference to provide this content.?

?I think clearly what?s happening to wireless carriers is they have to find a way to make up for voice revenue, it?s a balancing act,? he said. ?Voice over internet won?t kill business, wireless carriers just need to supplement the voice revenue lost with more data plans and apps.?

Ross Rubin, director of industry analysis, consumer technology, at the NPD Group, New York, said that voice is becoming less of a revenue driver for carriers and AT&T knows that.

Mr. Rubin said AT&T plans that include rollover minutes, allowing the voice service to accumulate, shows that the wireless carrier has been proactive.

Carriers have been under scrutiny for the applications allowed on networks, and Mr. Rubin said AT&T has seen particularly harsh criticism because of the Apple App Store?s restrictions and by changing its policy the company is joining the ranks of other worldwide carriers.

?We?re at a turning point where enabling voice apps over the data network will extend the utility of data plans, without doing undo strain on the network like opening the door wide open for video apps would do,? Mr. Rubin said.

In the not so distant future
With the new changes to policy for its 3G network, AT&T may be thinking ahead to the future of 4G networks.

Mike Saxon, senior vice president of technology, media and telecom of Harris Interactive, New York, said that these provisions by AT&T are good, but consumers will not get the full use of them.

Mr. Saxon said that wireless carriers are more than likely going to be using 4G networks in a year.

?Wireless VoIP is a fait accompli [after the fact] ? all the major wireless carriers are moving to 4G technologies, like long term evolution,? Mr. Saxon said. ?The fundamental difference between 4G, and current wireless technologies, is that with 4G all voice communications will be VoIP. 

?So, AT&T is simply allowing access to the technology that they?ll be switching to in a year anyway,? he said.

However, with these new policy changes, Google is not sounding the trumpets of triumph yet.

The case that famously sparked it all this summer still remains unresolved.

?We haven't heard any change in status with regard to the Google Voice for iPhone app,? said Sara Jew-Lim, a San Francisco-based spokeswoman for Google.