Voice over IP
A Discussion of Business and IT Challenges
Voice over IP and IP Telephony Trends
VoIP is an old concept which has just recently emerged as a threat and as well as an opportunity
for telecommunication industry. Forward looking telecom companies see VoIP as an additional
service offering and a competitive advantage, where as old-fashioned slow-moving companies
view it as a serious threat to their survival.
Vonage Holdings Corp, a New Jersey based consumer VoIP company, recently completed five
million VoIP calls. They have successfully implemented VoIP/IP Telephony as a competitive
advantage over traditional local and long distance companies.
The table (see Chart 1) below shows the VoIP retail voice revenue compared to traditional
telecom revenues over the last few years:
Chart 1: Impact of VoIP on retail voice revenue
Impact of VoIP on Retail voice revenue
Total voice revenues (US$m) - VoIP percentage in brackets
| |
2002 |
2003 |
2004 |
| Asia-Pacific/Japan |
76,074.6 (2.1%) |
18,993.8 (2.8%) |
80,641.3 (3.4%) |
| North America |
165,935.1 (0.2%) |
160,647.2 (0.35%) |
160,305.9 (0.55%) |
| Western Europe |
113,622.7 (0.9%) |
112,984.9 (1.4%) |
112,243.3 (2.0%) |
Source: Gartner 4
Even though VoIP has a very small present market share, the trend is increasing towards it.
According to a research report by Forrester Research:
“Voice over Internet Protocol (VoIP) is racing toward mainstream acceptance, steered by
attractive price points--currently $200 to $500 per line--proven cost savings in early-adopter
deployments and significant improvements in voice quality and reliability.” 5
In December 2003, Telezoo.com conducted a survey of more than 3 million queries from
professional information technology managers on 4,000 products and services.
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