December 04, 2004

Airtime Arbitrage?

PhoneBoy and Leonardo Faoro have described a service from a company called Xcelis. In short the service allows you to make free long distance call using your cell phone, by routing the call through their “cell phone” and the usual VoIP architecture. Their customers do not consume air minutes because of “mobile to mobile” calls and they charge $10 per month to cover their expenses. It is a pity that the industry has been reduced to scavenging for ARPU with no inherent innovation. It is worse because no attention has been paid to sustainability of the service. Will the cell providers be complacent and not do anything to prevent such parasitic services? The following is an excerpt from Verizon Wireless Service Terms and Agreements: “National IN Calling is not available to customers whose wireless exchange restricts the delivery of Caller ID or with fixed wireless devices with usage substantially from a single cell site.” Note that, their cell phones will be used from a single cell site, thereby not be eligible for IN calling.

Added clarification: Verizon Wireless calls mobile-to-mobile service to be "IN calling". Unfortunately this terminology might mislead one to read that the discussion is referring inbound calls. But I am talking about a call originated by a VZW customer that is being patched by Xcelis and then forwarded to the intended phone over a VoIP network. Xcelis will be used from a single cell, thereby violating the T&C of "IN calling"; so the call to Xcelis equipment will not be considered mobile-to-mobile thereby incurring airtime.

Posted by aswath at December 4, 2004 12:02 AM
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