VoIP to transform telecoms market

$32bn cash cow by 2009

By John Leyden, 24th May 2004

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Internet telephony will make up 12 per cent of all telephony revenues in five years time, according to a study by analysts Juniper Research published last Friday, Juniper reckons the VoIP (Voice over Internet Protocol) market will contribute $32bn, out of a total telephony market worth approximately $260bn, by 2009.

Service providers face the challenge of balancing new VoIP revenues against declines in their traditional fixed-line revenues, as flat-rate IP-based voice tariffs replace time and distance related charges. These changes will benefit more nimble service providers, according to Juniper.

Ian Cox, broadband specialist at Juniper Research, said: "VoIP brings new revenue generating opportunities to the telephony market, by combining voice services with other IP applications. This will redefine the telephone bringing brand new services, with telephony at its core."

According to Juniper, initial residential use of VoIP will be via a 'PSTN-bypass' through a PSTN interconnect (this excludes free PC-to-PC or peer-to-peer services, that do not offer PSTN interconnect). However in the longer term voice will be offered as part of a service bundle that includes email, Internet access and video telephony. This will be the fastest-growing segment by 2009.

In the enterprise, calls from IP-VPNs (virtual private networks) will also grow quickly as companies take advantage of network convergence to reduce costs.

Juniper reckons light touch regulation over the growing VoIP market ought to be the order of the day. "A balance needs to be established between promoting healthy market competition and ensuring widespread VoIP adoption on a fair and equitable basis. VoIP requires nurturing in the early years as the market develops," it said. Services providers should focus on creating service bundles to score the best success in the market, Juniper further advises.

Juniper's findings come from a white paper, Voice over IP and Network Convergence, published last week and available from Juniper's website (registration required). ®

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