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VoIP Feature Article


July 31, 2006

Infonetics: VoIP Goes Mainstream as Carrier Revenue Source

Mae Kowalke, TMCnet Associate Editor

It’s official: Voice Over IP, or VoIP, is no longer a specialized service available only from specialized providers.
In fact, the availability of VoIP from providers of traditional phone service is accelerating, Infonetics said in a new report out today. 
“Next gen voice services have elevated from lab curiosity to market reality,” Infonetics analyst Stéphane Téral noted in a statement.
So what’s behind the boom?
Infonetics examined the market and concluded that carriers increasingly are adding VoIP to their offerings as a way to offset falling income from traditional phone service.
In a recent Infonetics survey, 83 percent of service providers in North America, Europe, Asia Pacific and Central & Latin America “rated the availability of new applications and services the highest among drivers for adopting VoIP products.”
This, the research firm said in a press release, confirms the revenue is the main reason carriers are migrating to packet networks.
That migration oftentimes is a costly one in the short term, and may also be lengthy.
“Replacing installed legacy gear in high teledensity areas like North America and Western Europe will take at least 10 to 15 years,” Infonetics pointed out. “In these areas, many carriers are letting their legacy equipment slowly churn while using VoIP now as an augmentation or an alternative, or when more capacity or expansion to a new location is needed.”
Meanwhile, many newer companies—as well as incumbents in places like Eastern Europe and South East Asia where teledensity levels are not yet up to average—are opting to hit the ground running with VoIP as their primary platform, essentially bypassing old-generation telephony, Infonetics said.
In the course of its research, Infonetics found that equipment interoperability is cited as the top barrier to entry for carriers joining VoIP market. Carriers specifically expressed concern about the lack of industry consensus regarding definitions for IP Multimedia Subsystem (News - Alert) (IMS) architecture
Speaking of industry standards, the research firm also noted the importance of the SIP protocol—both as a tool for connecting IP-based applications to one another, and as a method of offering fixed mobile convergence.
SIP has become so ubiquitous to VoIP services, in fact, that respondents to the Infonetics survey predicted the protocol will reach 100 percent penetration by 2007.
Despite these hurdles, “service providers expect both incoming and outgoing VoIP traffic to nearly double over the next year, with international long distance traffic growing the fastest,” Infonetics reported.
Mae Kowalke previously wrote for Cleveland Magazine in Ohio and The Burlington Free Press in Vermont. To see more of her articles, please visit Mae Kowalke’s columnist page.


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