VoIP Poses Only a Minor Threat to European Telecom Incumbents

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VoIP Poses Only a Minor Threat to European Telecom Incumbents

1:10 am on July 10, 2006 | Category: Business, VoIP, Telecom Services, Telephone

Contrary to popular belief, the increasing popularity of VoIP technology poses little threat to the long-term success of traditional telephone providers in Europe, according to a recent report by Moody’s Investors Service.

Although it seems a given that VoIP services will erode telecom revenues, researchers say that the effect should be small and gradual, with losses being offset by gains in broadband and mobile phone services.

“The percentage of traffic which will be on Voice over IP is going to be marginal, meaning somewhere between 5-10 percent in 2010,” commented Carlos Winzer, who authored the Moody’s report. “For an integrated operator, the upside of wireless plus the contribution of broadband overall will compensate for the marginal threat of Voice over IP.”

Asked if an when VoIP could become a real threat to incumbents, Winzer replied that “it is certainly beyond our rating horizon and (we are) probably looking at 2010 and thereafter.”

And it goes without saying that in the fast moving world of communications technology, four years is a long time indeed. Telecom providers around the world have already started marketing their own VoIP offerings, and could easily dominate the VoIP market by the time IP communication overtakes traditional telephone lines.

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At last, a report that recognises that for consumers to use VOIP they need to sign up for broadband. I’ve seen many adverts that suggest to people that they can make free calls - and while their phone bills for calls will go down the broadband connection costs never seem to appear.

Now, it needs all the VOIP providers to get together so that you can make calls across networks - that would be neat.

Comment by John — July 11, 2006 #