Thursday, 11 March 2010
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| Tuesday, 29 April 2008 | |
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VoIP to kill off traditional telephony?
New research by business and financial adviser Grant Thornton predicts that despite the global downturn, consolidation in the voice over IP (VoIP) sector will continue apace as telcos and IT companies battle for chunks of the expected £13.5bn in global revenue VoIP will generate in 2010. The research, part of a report by Grant Thornton into VoIP convergence, predicts that migration from fixed line to mobile and VoIP services will increase exponentially over the coming years and result in a raft of consolidation in the sector through 2008, signalling the death knell of traditional telephony. Sarika Patel, head of technology at Grant Thornton, cites the doubling of the VoIP customer subscriber base in 2006 and four fold in the last two years as just one reason to believe that the VoIP worldwide customer base with top 250mn in two years. “VoIP is no longer next generation telephony, it is here now, and 2008 should see strategic acquisitions of independent software developers and ISPs by large telcos looking to consolidate their VoIP offerings,” judges Patel. Patel says that the past 12 months brought about tremendous change for VoIP with improving technology solutions and enhanced ability for ISPs to cater for VoIP calls resulting in the rapid increase in the uptake in the technology and changes at the heart of the communication's industry business plans. “VoIP has disrupted the traditional value chain in the communications industry with the focus now falling on IP rather than traditional voice calls. As such, there is a bitter turf war taking place in the fragmented market of service provision, particularly for customer ownership,” says Patel. “Incumbent operators are looking for traction in the VoIP sector and are aiming to offset declines in traditional voice revenues and retain customers by grabbing a stake in the software developers heading up the VoIP wave. A surge of M&A activity in 2007 is testament to this and consolidation with continue this year, despite tight credit conditions.” However, Patel acknowledges that there are still concerns in the sector which need immediate action in order to cement VoIP as the next generation of voice and video communication. “Security remains a major concern,” says Patel. “VoIP is more secure than it ever was, but eavesdropping, viruses and fraud are still a threat. Currently, software encryption products are available, but it is inevitable that encryption will be integrated directly into VoIP systems in the near future. If this is successfully managed and brought to market, VoIP will garner the confidence of business and uptake will jump.” John Williamson |
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