VoIP: Sunny Today, but a Cloud on the Horizon

Carl Weinschenk
Slide Show

Five Things You Need to Know About VoIP

The top five things you might not be aware of, but should know when it comes to VoIP.

Things go from new to standard to antiquated quickly in the world of modern telecommunications. VoIP still seems like a newcomer; however, it now is part of the established telecom infrastructure. Indeed, it arguably is the predominant telephony platform.

But uneasy lies the head that wears the crown. While a couple of reports suggest that days are good for the VoIP infrastructure, there is at least one cloud - a potentially significant one - on the horizon coming from even newer technologies.

First, VoIP's good news. TechNavio says the global carrier VoIP market will grow at a compound annual growth rate (CAGR) of 16.6 percent in the period from last year to 2015. Information is sparse in the release, but it does say that a potential challenge to that healthy growth will be the transition from traditional VoIP to IP Multimedia Subsystem (IMS) equipment, which the organization apparently classifies as discrete.

Infonetics identifies IMS and VoIP individually, but sees them as close enough to report on them together. The release says that the market for the two categories was up in the fourth quarter of last year, but notes that such an increase is typical for the end of the year. The more important comparison is against the year-ago quarter. That measure was down 2 percent, the release said. That downturn may be temporary, however, as the IMS and session border controller (SBC) markets grow large enough to overcome the declines in legacy product sales.

It's fair to say that the news from those reports is mostly good. The sobering note was sounded by Standard & Poor's. It is a bit indirect. The cable industry, without a doubt, is the main purveyor of VoIP in the United States. An industry strategy is to bundle video, VoIP voice and data. The approach is to offer a good deal on the three services. Taking services a la carte is proportionally more expensive. Splitting services between the local telephone and cable companies is cumbersome and not generally done.

The bundling strategy has served cable operators well and has been embraced by telephone companies. The problem is that the over-the-top (OTT) IP video approach is sawing off one leg of the three-leg bundle. Simultaneously, bargain-basement voice alternatives are threatening a second leg - especially if more of the subscriber base has already moved from service provider to OTT video and is not as tightly linked to the cable or phone company. Says the FierceEnterpriseCommunications story on the Standard and Poor's study:

S&P said it expects growth in the cable VoIP sector to hit a wall and see considerable fall off in months to come, possibly reflecting the decade-long erosion of revenue that telcos have seen in their landline business. The losses, S&P said, will be driven by newer technology options--everything from low-cost VoIP and Skype to services like, you guessed it, wireless.

It may not be as dire as the story suggests. The cable and telco folks are savvy and will adjust their approaches. It is, however, a sign that things are constantly in flux. VoIP now is part of the establishment - an establishment that just a decade ago it helped to overturn.

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Add Comment      Leave a comment on this blog post
Apr 5, 2012 5:08 PM Warren Warren  says:

Actually, this is not a "cloud" for VoIP, but merely a cloud for legacy fixed VoIP (calbleco being a major part thereof). But if the warnings prove correct and OTT applications for voice/video/messaging replace a service bundle that ties a fixed VoIP application to a network access provider, these new applications are still "VoIP". And as end-users continue their migration toward mobile communications, the roll-out of LTE actually ensures more "VoIP".

it would be more accurate to observe that it is virtually assured that the transition of voice (along with video/messaging, etc.) to IP networks contnues unabated, but that the voice application continues to be decoupled from network access, creating some "clouds" for network provider VoIP offerings.

Apr 11, 2012 9:31 AM Rachel Sara Rachel Sara  says:

i need a suggestion, Which is the best voip app for iphone in term of quality and pricing? currently using skype, viber and friendcaller

Aug 21, 2012 9:21 AM Calling Card Platform Calling Card Platform  says:
I think Skype is better than other two.....For More Products checkout www.voipswitch.com/.... Reply
Nov 30, 2012 9:01 PM Kevin Kevin  says:
The bundling problem is something to consider when looking at VoIP services, but many VoIP providers offer these features as well. Reply
Mar 30, 2013 10:58 AM Henry Henry  says:
It is a good move and will help all expats make calls to their home countries. Hope the internet cafes can get this service so that they will not opt for any illegal VOIPs in future. I just want to inform everyone to a new web site called VoIP Spear (www.voipspear.com) to measure your QoS. It's the Internet's best and most accessible QoS testing service. Reply
Apr 26, 2013 12:46 PM ruth cole ruth cole  says:
Great article With internet acting like a life stream in the evolving technology, it is making the things easier every day. VoIP is like having the best of both worlds. So the Future looks pretty bright for VoIP Reply

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