As the hoopla over Apple’s rejection of Google voice grows, I came across a very interesting article in the USA today:

“…Consumers who use Android, the Google-developed operating system for wireless devices, can’t use Skype, a leading Voice over Internet Protocol (VoIP) service. A pioneer in free Internet calling, Skype allows you to talk as long as you want without draining cellphone minutes. Android users get Skype Lite, a watered-down version of the original that routes calls over traditional phone networks — not the Internet.”

Wait, what?! Google and TMobile block Skype, but get all hot and heavy because Apple blocks Google Voice? Weird world indeed, and there is certainly a lot of chest-puffing and name-calling, but some of it quite hypocritical.

And why should AT&T be scared of Google Voice? The impact could be huge. But before that, a little personal back story. As an early adopter of Google Voice (GV), I was lucky enough to get an account back in the Grand Central Days, and I have been using and loving the concept for over a year already. One number for everything, perfect! When I finally took the plunge and gave that number to all my friends, asking them to “kindly update their address books with my new number”, there was no turning back.

When Google near simultaneously released apps for the blackberry and the iPhone, it was a nice touch. Since I have a blackberry, the app wasn’t blocked like it was for the iPhone. The app itself makes Google Voice actually usable on a day to day basis. Without the app, Google Voice is clumsy and imperfect, and will not be widely adopted. Users must open the browser and go to google.com/voice in order to check messages, call someone, or send text messages for free. It just takes way too long in practice. The app makes all these functions easily available at your finger tips.

So it wasn’t really a surprise when Apple announced the iPhone App was rejected (or was it just suspended, its hard to tell). In either case, AT&T would miss out on big text messaging revenue.  Some have made the argument that the app was not approved because it wold route calls through VOIP instead of over AT&T’s cell lines, thereby not using cell minutes. While that is certainly possible, that is not generally how the app works. Calls still take place over the same infrastructure, still use cell minutes, but are routed through GV first. It could make internationally calling cheaper, but not normal day to day calls. However, since you can choose to deliver text messages either to your handset, or just to the app, you can generally completely avoid text messaging fees.

How many text messages are sent on AT&T’s network you may ask? From the horse’s mouth, AT&T’s latest Quarterly Press Release form July 23, 2009, here are the stats:

“Wireless text messages on the AT&T network exceeded 108 billion, more than 1 billion text messages a day and nearly double the total for the year-earlier quarter.”

Wow, 1 BILLION a day?! At 20 cents each (which is not quite accurate, because most people have plans that include some or man messages), that’s potential revenue of over $200 Million a day. Its impossible to tell the real revenue impacts, but assuming most users of the iPhone have either the $5 , $15, or $20 a month text messaging plan (thats 1500 messages), and that there are 20 million iPhone users (conservative), we are talking about a realistic potential loss of  ~$200-$300 Million a month revenue just for iPhone users switching text messaging to Google voice.

So we can see that, giving any user with an iPhone FREE text messaging would be very expensive for AT&T indeed, and that doesn’t even include the international calling aspect.

Whats the endgame? As Mark Sullivan suggests, Apple may greenlight Google Voice for Wifi Only, similar to what Google did to Skype. This may placate Google and Apple, but in the end, the customers (us) are still getting fleeced by both companies.