Mystery Surrounds Vonage iPhone App

Vonage's newly announced iPhone application is a great money maker even before its launch. Simply announcing that the application had won App Store approval sent the Internet telephony pioneer's stock up 36 percent. The problem is, no one knows what the app will do. The company is saying nothing about it "for competitive reasons." But whatever it ends up doing, it will likely be far from earthshaking.

The most obvious function of the application – simply allowing users to make Vonage calls from their iPhones – would for many also be the most valuable. The recently introduced Vonage World plan provides unlimited calling to more than 60 countries, as well as within North America, for $24.99 per month. Being able to access that service from the iPhone could save heavy international callers lots of money. At least the international portion of the call would travel over Vonage VoIP trunks rather than cellular providers' circuits. That would let users avoid paying international cellular rates that often amount to dollars per minute.

The application almost surely won't extend Vonage's VoIP calls all the way to the iPhone handset over the cellular data network. Apple currently doesn't allow iPhone apps to so, which leaves a couple of other options.

First, the app could intercept calls it recognizes as going to international destinations, and redirect them to a local Vonage gateway. From there, the calls would travel overseas via Vonage VoIP connections. Users would still have to pay for local cellular minutes, but they would save big on international charges.

The other alternative is for the application to send Vonage calls to and from the iPhone via Wi-Fi connections rather than cellular voice links. That would let users save on international calls, and also to avoid using their cellular minutes. It would only work, of course, at Wi-Fi hotspots.

Neither of the options is revolutionary. Several companies, including 8x8, MyGlobalTalk and Truphone, already offer cheap international calling using cellular voice connections. Similarly, fring, iCall and Skype offer Wi-Fi VoIP calling for iPhones.