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November 03, 2006

Driving Revenue into the Network Through Higher-Margin, Value-Added Services

By Barry Sher, Business Development, IVR Technologies, Inc.


 

The telecommunications industry is undergoing a fundamental shift as it migrates from circuit to IP-based switching. This profound change is resulting in more efficient network architecture with lower administration and operating overheads. It is also leading to the democratization of the provision of telecommunication services as well as the commoditization of providing them, with far greater functionality and breadth of services. 

Juniper Research, a research and consulting firm recently stated: “Although much attention has been paid to the more complex and ‘sexy’ value-added services like video-on-demand and online games, it appears that the biggest opportunity will be in voice services as broadband-IP voice takes over from traditional circuit-switched voice.” In the residential market, Juniper reckons voice over IP (VoIP) will grow from $4.29bn to $27.1bn in 2009 and business use will see VoIP grow from $4.54bn to $20.09bn in 2009 — these figures put the combined VoIP market at $47.19bn.

Along with this great opportunity comes increased competition and reduced margins as new companies try to gain market share from the incumbents by competing solely on price. These downward price pressures coupled with growing global deregulation will serve to commoditize long distance services resulting in great consumer benefit and increased overall market demand.

Today we see new and established service providers making strategic investments in their networks to better position themselves to withstand the forthcoming market forces that will forever change the telecommunication industry. These crucial investments will allow these providers to be able to introduce the more robust and application-rich VoIP technology, and secondly, to be able to offer higher-margin and more differentiated services that go well beyond basic call termination services. By combining the power and flexibility of VoIP technology and the ease, ubiquity, and richness of the Web, providers can now provide consumers with a level of empowerment that was just not possible in the circuit-based network.

With the widespread adoption of VoIP we are starting to see network efficiencies and time to market advantage with the VoIP technology itself as well as with what the technology offers, like the ability for on-the-fly peering and SIP trunking that removes the provisioning overhead and turn-up delays of the past.

We are also starting to see innovative companies emerge like iotum, TelEvolution and GrandCentral that recognize the value of broadband connectivity and open standards and are providing the market with solutions that offer streamlined communication, cost savings and most importantly end-user empowerment. With new Web technologies like AJAX emerging we can only expect that the level of control and customizability offered to the consumer will only increase.

We still live in a world where our connectivity and access is increasing but we still seem to have less time to connect. We want to get to a point where we can easily tailor all of our communication needs centrally with an intelligence that knows where to contact us, when to contact us and how to contact us. In the Voice 2.0 world we also want to have a central repository for our messages, be it e-mail, voice, fax, or IM, and be able to annotate them, store them and manage them through different modalities. We will know we have arrived when we can transfer calls without first prefacing the action with “If I lose you please call back.”

Richer services include being able to easily perform call management, access all of our inbound/outbound call history via the Web, provision new services on-the-fly when it is convenient for us, create access, and blocking rules (just in case we do not want to be pitched during dinner with yet another opportunity to switch long-distance providers), being able to selectively broadcast our presence, being able to manage multiple identities as well as being able to set up parental controls.

Next-generation services attract new subscribers and retain existing ones as they are designed around empowerment that increases customer loyalty and offers a broader range of integrated services that carry with them higher margins. By combining additional services with feature rich interactive voice response and flexible real-time billing facilities, the service provider can now have the infrastructure necessary to build highly competitive, customer tailored valued-added services that allow for creative and targeted marketing. With the substantial market growth that industry research firms have forecasted success will come to those providers who understand and appreciate the necessity of being able to offer value added services that can drive higher profitability into their network through architectural efficiencies, lower administrative overhead and in-demand and adaptable services.

Barry Sher is Vice President of Business Development at IVR Technologies, Inc. (www.ivr.com), a leading vendor of application, media and real-time billing solutions. Mr. Sher has been actively involved in telecommunications since 1994 and has a successful track record in building innovative telecommunication software development companies. Prior to IVR Technologies, Mr. Sher was President and co-founder of Telephony Experts, Inc., an Inc. 500 company.

 





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