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Video Calling Expected to Take a Leap in Popularity in 2011

February 14, 2011

Video calling has made several attempts in the past to gain mainstream adoption and move away from the Hollywood scene to the corporate and consumer environments. Now, according to this New York Times report, experts say video telephone will gain popularity in 2011.

Analysts highlight that the demand for video calling services such as Apple’s Facetime, Skype and Fring, has skyrocketed over the past two years as a result of faster wireless networks, smarter phones and the proliferation of social networking.

Skype began offering video calls on Apple’s iPhone on Jan. 1 and on the first day, users placed one million video calls from their mobile phones. It has been estimated that in 2010, 40 percent of Skype’s calls, or an estimated 70 billion minutes, were generated by video telephony between computers.

The company has also entered a video calling partnership with Verizon Wireless. At Mobile World Congress – which launched Monday in Barcelona – Skype plans to intro a new application that will allow for video calling from mobile phones to television sets.

Similar successes have been reported by Fring, Skype's Tel Aviv-based competitor. Customers have reportedly booked more than 100 million minutes of video calls since November of 2009 when the company began selling its video calling service for mobile phones.

Fring currently runs on Apple’s iPhone, Google’s Android and Nokia’s Symbian operating systems. According to co-founder Avi Shechter, the service is popular in North America and Europe, as well as Russia and emerging markets like India and South Africa.

Investors also appear to be focusing on the technology and its commercial potential.

The Carlyle Group, considered the world’s second-largest private equity group after Goldman Sach’s private equity firm, bought Syniverse in December. The Tampa, Fla.-based software maker offers products such as software to enable video calls that will take place between different operators. The Carlyle Group bought the company for $2.6 billion.

Tony Holcombe, the Syniverse chief executive, noted that adjusting for differing technical standards used by operators around the world is key to advancing video telephony. He noted that in just one generation, the telephone has gone from a voice device to a texting device to a camera-picture device. It is now important to help operators to seamlessly transmit video calls between each other.

Even with the growing demand and the advancements in technology, there are still a number of obstacles to overcome before video calling goes mainstream. First, wireless operators must be able to handle the surge in video traffic on their networks, and be able to offer widespread use that is affordably priced.

The elimination of flat rate calling plans could discourage people from making video calls. The biggest perceived obstacle, however, is whether or not consumers will be just as willing to answer a video call as they are a voice call.

Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.

Edited by Tammy Wolf