VoIP Eats Into
Voice Service Revenue
A new report says that because of VoIP,
traditional voice service will soon not be the
primary revenue generator for traditional
telecom operators in developed nations.
By David Haskin
May 16, 2006 11:13 AM
In a few years, incumbent telecom
operators will no longer earn most of their
revenues from traditional Public Switched
Telephone Network (PSTN) voice service,
according to a study released Tuesday by U.K.
market research firm Informa Telecoms & Media.
The precipitous drop in PSTN
revenue will be caused by increasing use of
voice-over-IP (VoIP), a trend the telecoms will
need to continue to capitalize on, the study
says. The study predicts a worldwide decrease in
revenues from traditional PSTN voice service of
about 16.7 percent between the end of 2005 and
2011. That percentage works out to about $100
billion in lost earnings from traditional voice
service, the market research firm said.
The market research firm company
said that VoIP accounted for only 25 percent of
the total revenues for telecom operators in
2005. The good news for the operators is that
they have widely built out their broadband
networks over which VoIP service can be offered
and the percentage of revenues the telecom
operators gain from VoIP is expected to rise
significantly, the report concluded.
"After 2010, PSTN will no longer
be the main revenue generator in developed
countries," report author Malik Saadi said in a
statement. "There will be no justification for
big operators to reserve a whole network for
traditional PSTN voice traffic. This trend will
increasingly push operators and network owners
to gradually migrate their subscribers from
traditional PSTN to VoIP."
Saadi noted, though, that there
is peril in this trend. In particular, there is
the threat of revenue loss for telecoms because
VoIP charges are lower than those for PSTN
service, he said. In addition, there is a lot
more competition from dedicated VoIP vendors
such as Skype and Vonage, according to Saadi.
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