VoIP Boosting Carriers' Bottom Lines

New Infonetics study finds increased deployment of packet voice networks among traditional phone providers.

By Ted Stevenson | Posted Aug 2, 2006
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It's no surprise that VoIP is taking hold and increasingly grabbing market share from traditional circuit-switched telephony, but a new study from Infonetics ResearchService Provider Plans for Next Gen Voice and IMS—reveals that deployment has shifted from VoIP pioneers and specialist providers to mainstream carriers, worldwide.

The reason? Well, there are two. First, the technology is relatively mature, no longer considered risky or unreliable. "Next-gen voice services have elevated from lab curiosity to market reality," said Stephane Teral, Infonetics' principal analyst for service provider VoIP, IMS, and FMC (fixed/mobile convergence).

Second, carriers are moving to packet networks—with their lower deployment and operating costs and the new applications and services they enable—to boost their bottom line, as revenues from TDM systems declines.

The report contains some interesting paradoxes. For example, while IMS (the emerging IP multimedia subsystem) technology was hailed by study respondents as a benefit, due to the ease of new service creation it provides, it was also cited as a significant barrier, since there are as many flavors of IMS as there are infrastructure vendors. (That is, there are no consistent interpretations of the as-yet-adopted standards; equipment from different vendors does not interoperate.)

Further, the study predicts that although VoIP traffic—both incoming and outgoing—is on track to double over the coming year, in the more densely populated regions of the world, it will make only a gradual replacement of TDM systems, taking 10 to 15 years to complete.

On the other hand, late-breaking trends, such as the adoption of fixed/mobile convergence—where phones and network infrastructure can switch calls from cellular to IP networks, when the latter is available—are creating entirely new sources of and markets for VoIP.

Then again, says Infonetics' Stephane Teral, "New entrants to the VoIP market and incumbents in regions like Eastern Europe and South East Asia that are bringing teledensity up to average levels are deploying next-gen voice as their primary platform."

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