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| VoIP Solutions New VoIP Solutions from SmartPrice: What are VoIP Solutions? | Will VoIP Products/Services Work for Me? | The VoIP Industry | VoIP Phone Glossary | VoIP Service Success | VoIP Phone & Service Products VoIP Has the Whole Industry Talking September 02, 2004 ©2004
eMarketer Inc. The challenge to service providers will be to manage this convergence, balancing new VoIP revenues against declines in traditional fixed-line revenues as flat-rate IP-based voice charge programs gradually replace time and distance-related charges. In fact, VoIP will morph into PoIP (Presence over Internet Protocol). Unlike traditional telephony that transmits over a PSTN, with PoIP, devices will automatically select the most appropriate form of communication for the time and place.
As Ian Cox, Broadband Specialist at Juniper, says, "VoIP will bring new revenue-generating opportunities to the telephony market by combining voice services with other IP applications." This shift will fundamentally redefine the telephone and bring a host of new options to consumers. Telephones will soon offer services formerly associated only with the PC. According to Juniper, by 2009 the VoIP market will also become the key revenue generator for broadband service providers, contributing to an overall value-added services market of $47 billion. This will be in addition to the $43 billion spent on broadband access in the same period. Mr. Cox says, "Broadband penetration has now grown to a level where the industry is on the verge of a revolution, as it is now economically attractive to launch value-added services to a mass audience." A projection of the revenues from those services, made by Juniper earlier this year, is broken down in the following chart: Although much attention has been paid to the more complex and "sexy" value-added services like video-on-demand (VOD) and online games, the biggest opportunity will be in voice services as broadband IP-voice takes over from traditional circuit-switched voice; driven by lower operating costs and competition between incumbents and new licensed operators. In a related report from The Yankee Group, the research firm projects that VoIP will have close to 1 million subscribers by the end of 2004, and serve 17.5 million US households by year-end 2008, growing from 131,000 at year-end 2003. The Yankee Group report notes that although Vonage currently dominates the market, cable multiple system operators (MSOs) will take the lead quickly, capturing 56% of the US local VoIP market by year-end 2005. Cable MSOs' share of the local telephony market will reach nearly 10% by 2008. But the telecoms are coming. The success of Vonage has spurred a dramatic response from major telephony players. AT&T, Verizon and Qwest have committed to local VoIP rollout strategies for 2004. While Sprint, SBC and BellSouth view the consumer VoIP market with more caution, the major industry players are now committing to mass-market deployment of their VoIP services. "These companies have the potential to capitalize on the market's momentum," says Kate Griffin, senior analyst at The Yankee Group. "Although alternative players and the MSOs maintain a head start in the consumer VoIP market, U.S. telcos can leverage their knowledge of telephony delivery, marketing, support and brand recognition. Operators that brave the uncertainty and enter the VoIP market will gain the ability to define the service and set consumer expectations." ©2004 eMarketer Inc. All rights reserved
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