Margins on voice and SMS have always been under competitive price pressure, but relatively recent developments in data services and the rise of OTT players means mobile operators need to start defending their territory from outsiders in addition to competing with each other.

Mobile VoIP in particular has undergone some rapid changes. Over the top providers are able to deliver services that avoid the carriers billing systems completely. The bar for mobile voice competition has been lowered with the arrival of the latest smartphones capable of running a telephony service, combined with open platforms supporting third party applications and growing availability of high-speed, low-cost wireless networks such as Wi-Fi.

Skype, which recently became the single largest provider of international voice services, along with other mobile VoIP providers have long threatened to encroach on mobile operators’ turf, conditions are now right for that eventuality to become a reality. The impact is being felt most with international direct-dial and revenues associated with roaming. While the revenue impact is growing substantial, a greater issue exists in the background.

While rate arbitrage opportunities exist, mobile network operators are effectively leaving users to train themselves into using the likes of Microsoft’s Skype, Google Voice and even Apple’s Facetime/iMessage to provide discount mobile VoIP services. In terms of timing, this development could not be worse.

The mobile industry about to undergo a major technical evolution – LTE. In addition to delivering high-speed access to the “mobile internet”, LTE offers exceedingly low latency. The type of latency that will make the VoIP Quality of Experience comparable with current circuit switched voice.

Latency is the time it takes a packet to get across a network, and low latency critical to delivering an acceptable VoIP service. LTE in the US offers latency that’s quite often 10 times (or more) faster than 3G/HSPA networks. Many mobile VoIP services encourage usage over Wi-Fi because it delivers latency as fast, if not faster than, LTE.

The introduction of a nationwide LTE network gives any subscriber with a smartphone access to a low latency, high speed mobile internet akin to what they have come to expect in a fixed-line environment. Now one of the key barriers to mobile VoIP adoption, network performance, has been solved.

It’s easy to imagine a subscriber bringing home a brand-new LTE smartphone and immediately downloading an OTT VoIP product like Skype. Driven by rate arbitrage and encouraged by network performance, subscribers are quickly becoming comfortable with mobile VoIP.

Rather than training subscribers how and when to use these services, mobile operators need to own the mobile VoIP space. It’s within reach. First, they need a mobile VoIP product that sits side-by-side with OTT products. Users already have a trusted relationship with their mobile providers, and will often turn to a brand they know for a solution first. Operators can easily fill this gap by offering a branded mobile VoIP product.

Next, operators can take advantage of the branding opportunity afforded by getting away from the generic dialer. Skype, Fring, Viber are solidifying their brand every time people use their products. The icon, the user interface, the service is all branded.

Yet mobile operators are relegated to the un-branded and un-differentiated generic dialer icon on every smartphone. They can create a branded VoIP product which engages customers and provides a differentiated user, and potentially service, experience.

Under the umbrella of this branded VoIP Application user interface, mobile operators can begin transitioning subscribers from the circuit-switched network to a comprehensive mobile VoIP service experience. As users turn to the operator-branded application, calls and texts can be routed via VoIP over IP networks, such as LTE and Wi-Fi, or delivered via circuit connectivity over 3G or GSM.

Over time, the app’s call routing decision can prefer VoIP-enabled networks and next generation SIP/IMS infrastructure, actively migrating customers onto the more efficient IP transport.

Without a plan to manage the transition to IP and the mobile internet, service providers risk leaving the door open to relentless OTT VoIP providers. The industry is on the cusp of a major technology transition to LTE, and it’s time for mobile providers to defend their voice and SMS services in this brave new world.