TextNow is a mobile virtual network operator (MVNO). Instead of reselling voice and data packages – in this case using US telco Sprint – TextNow sends all traffic over its 3G/4G data network.
Before you ask how it is done, it is similar to using Microsoft’s Skype to make calls. Skype is a voice over IP (VoIP) program that runs on Windows Phone/RT/Pro, Mac, iOS, Android and BlackBerry. It converts voice into digital signals (data) that it transmits to other Skype users, and via global telco gateways to any landline or mobile number – and vice versa, allowing incoming telco calls to enter the Skype network.
It is not rocket science. If you have a Wi-Fi, 3G or 4G mobile signal you have the ability to make VoIP calls.
What is interesting is that TextNow has a $19 per month plan that includes 500MB data, unlimited texting, unlimited inbound calls, and 750 roll over minutes of outbound calls. The top $39.99 plan provides 2GB data and 2,000 roll over minutes. You receive a standard US, or Canadian, telephone number from a number range it controls. Telcos' recognise these as VoIP calls and divert to data.
TextNow provide an Over-the-Top (OTT) app for iOS, Android and Windows Phone, and it can offer cheaper costs by aggregating user’s data and sharing it. Some will use more and some less, but it all averages out.
Not surprisingly, telcos are very concerned at aggregation and OTT technology because they will lose revenue. According to a recent report from research firm Strategy Analytics, "European operators stand to lose more than $3 billion (€2.3 billion) in mobile messaging revenues alone between 2012 and 2017, as consumers are attracted to use OTT messaging services."
The solution is for telcos to embrace the same OTT principles but they are not yet ready to ‘throw the baby out with the bathwater.’ In addition, various consumer competition regulators and watchdogs would jump all over telcos should attempts be made to preclude OTT over data services.
Note also that OTT is the same technology that Facebook, et al, wish to implement on their sites, eventually turning them into junior telcos.
There is no formal word when OTT services will come to Australia, but be sure it will be soon.