Why Gmail's New Phone Service Scares Mobile Providers

Google announced a new communication service this week - you can dial up your friends and talk to them on their phones through your computer. The service joins Gmail's other capabilities - like instant chatting, videochatting and of course e-mailing - and is probably not a function that mobile providers are rejoicing over. While many are calling the Gmail phone a competitor to Skype, mobile providers across the board may have cause for jealousy. Here are the big reasons why Gmail's snazzy new dialing power might alarm mobile providers. Sheer convenience As Gmail is advertising, this new service lets you contact your friends whether or not they are sitting in front of their computers. Of course, you can accomplish this by using your cell phone, but there's something neat about being able to choose your e-mail provider as the caller. Besides, your phone might be sitting in another room.... Your list of contacts also sits conveniently on your Gmail inbox home page - those names may act as reminders for who you haven't talked to in a while, and in a couple of seconds, you can reach them on the phone right from your computer. It won't revolutionize the way we communicate, but it does make Google seem like a nifty in a way that might peeve someone like Sprint or T-Mobile. Low rates Right now, calls to the U.S. and Canada are free - and will remain so through the rest of the year. The unlimited voice plans for top providers Verizon and AT&T are $69.99 per month. The international rates, too, seem reasonable for now: 2 cents a minute for calls to the U.K., France, Germany, China and Japan. Google is planning to release a Google Voice version for businesses soon. The business version would have a fee. But Google has already nixed Google Wave for businesses, and has been generally slow to tap the corporate market -- which could be incentives for them to get it right this time and offer Gmail calls at a competitive rate. Number of customers Google tweeted that people placed over 1 million Gmail calls in the first 24 hours of its availability. Not bad in a day's work. With over 92 million customers, Verizon is the largest wireless carrier in the United States. Gmail, however, has about 200 million customers, a lot lower than Skype's 560 million users, but still well above U.S. wireless carriers. The number of people that this phone service can appeal to, therefore, is pretty impressive. And may lead to just a little bit of envy on the part of say, T-Mobile or AT&T. Mobile providers may be scared of the Gmail phone service, but that won't necessarily translate into bad business. CNNMoney estimated that Google's revenue from the $20.3 million per quarter, which is less than half a percent of the company's total quarterly earnings. But if people make phone calls at the rate they did in the service's opening day, Google just might become a significant player on the field.

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Why Gmail's New Phone Service Scares Mobile Providers

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