Telcos spooked by VoIP adoption

21 September 2005 The world’s largest telecommunication providers are accelerating plans to offer Internet telephony services because of fears of losing revenues.

Analyst Heavy Reading has reported that worldwide telecom operators are preparing for half of the voice traffic they carry to go over the Internet by 2007 – an increase from less than 10% today.


The threat to revenues streams from traditional telephone calls has encouraged telecom operators to invest heavily in upgrading their networks, making them capable of carrying voice over Internet Protocol (VoIP) traffic.

According to Heavy Reading, 75% of telecom operators have already upgraded some parts of their network to carry VoIP traffic. By the end of next year, 90% are expected to have begun upgrading.

“The single biggest reason for deploying VoIP is fear that traffic would otherwise migrate to competitors’ networks,” said Graham Finnie, a senior analyst at Heavy Reading.

“Not surprisingly, this view is especially true among incumbent telcos – over three quarters of incumbent respondents saw fear of traffic loss as important or critically important to their VoIP strategy.”

Internet telephony is expected to fundamentally change the way users pay for calls. By moving away from traditional circuit-switched networks onto the Internet, call charges will be based less on location and duration.

Internet giant eBay recently paid $2.6 billion dollars to acquire Skype, a provider of Internet telephony services.

Heavy Reading interviewed 175 telecom companies across the globe, including BT, Verizon and BellSouth.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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