Internet Telephony Could Take 36 Per Cent of Market On Key International Routes by 2003 -
Internet Telephony Could Take 36 Per Cent of Market On Key International Routes by 2003 -
Core Revenues and Profits of Telecoms
Operators -TOs- at Risk
September 17, 1998
CAMBRIDGE, UK--(BUSINESS WIRE) via
NewsEdge Corporation -- Internet telephony
presents a major challenge to the telecoms
operators' current business model, according
to a report on the subject from Analysys Ltd
(www.analysys.com), the leading
consultants in telecommunications strategy.
"Service providers and vendors are entering
the IP telephony market at an extraordinary
rate," said the report author, Margaret
Hopkins, a principal consultant at Analysys.
"Low costs and the unregulated state of the
market mean that new entrants have a very
powerful competitive tool."
The report, Commercial Strategies for
Internet Telephony, tackles the critical
issues facing incumbent operators, new
entrants, Internet service providers (ISPs),
cable TV operators and IT vendors. It
examines how operators can develop their
own Internet telephony services and
addresses the factors which will influence
success - the technological challenges,
market prospects, application development
and regulation.
The report profiles leading-edge players in
the Internet telephony market, and includes
detailed case studies of USA Global Link, IDT,
ITXC, OzEmail, RSL/Delta3, Sonera (formerly
Telecom Finland) and VocalTec.
TOs can respond in a number of ways to
Internet telephony, according to the report.
They can ignore it and risk having to buy up
the competition later; they can join the
competition now and gain early market
share; or they can move up the value chain
by exploiting the value-added aspects of
Internet telephony.
"For established operators which own and
operate circuit-switched networks, a major
barrier to their entering the Internet
telephony market is the potential to
cannibalise their traditional revenues and
profits from existing services," said Margaret
Hopkins.
"However, innovative operators such as
Sonera and MCI do not see this as a
significant problem. They expect the price of
Internet telephony and PSTN-based services
to converge over the next three to five
years anyway. The falling cost of bandwidth,
the collapse of the international settlement
regime, deregulation and the increasing
upwards pressure on the cost of IP service
generally, are all contributing to this."
For new operators such as Qwest and Delta3
(now owned by RSL), Internet telephony
offers a relatively easy and cost-efficient
way of entering the voice market - by
undercutting the pricing regimes of
incumbents, while avoiding many of the
regulatory barriers to standard voice
provision.
"The current price differential for Internet
telephony will allow the new operators to
build up networks and expertise", said Philip
Lakelin, co-author of the report, "and put
them in a position to challenge the TOs with
enhanced services on the integrated IP
platform of the future. The TOs need to take
the challenge of Internet telephony very
seriously."
Internet (or IP) telephony is the term used
to refer to the transmission of telephone
(voice) calls over Internet Protocol (IP)
networks. From being seen as a hobbyist
activity for Internet enthusiasts talking to
their friends via computer, Internet
telephony has now become a competing
method of voice transmission for all
telephony users. The potential of Internet
telephony has been transformed by the
launch of new services by companies such as
Delta3, USA Global Link and Qwest, which
offer low-cost alternative
telephone-to-telephone services to
consumers and corporate users.
Published by Analysys Publications and
written by Margaret Hopkins and Dr Philip
Lakelin with Karin Sherwood, Commercial
Strategies for Internet Telephony, costs
GBP1295/USD2330 and is available in paper
format, or electronically via the Web or as
HTML or Lotus Notes files.
About Analysys ( analysys.com)
Since 1985, Analysys Ltd - the consultants
in telecoms strategy - has built a worldwide
reputation in the telecoms market, based on
rigorous research and creative analysis by
staff around the globe. Equipped with an
unrivalled understanding of telecoms
markets, technologies, policy issues and
strategies, Analysys Ltd has won a
pre-eminent position in telecoms
consultancy.
The company's publishing arm, Analysys
Publications, provides informed analysis and
accurate information on the trends and
issues affecting the telecoms industry. Its
portfolio, delivered in a variety of media,
covers a wide range of telecoms topics and
services. Recent reports include:
-- ADSL - Megabit Internet Access Arrives --
Extracting Value from the Internet:
Commercial Opportunities for
Telecoms Operators -- Third Generation
Mobile: Evolution or Revolution -- Commercial
Strategies for Fixed-Mobile Convergence --
The World Telecoms Marketplace 1998. |
