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500% Subscriber Growth = No Profit |
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Written by Adam Gosling
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Friday, 18 August 2006 |
Telco research outfit Telsyte has delved into some metrics
on the Aussie VoIP market and come up with some disturbing figures.
In its latest research, The Australian VoIP Market,
2005-2010, the company estimates that for every A$1 spent on VoIP services the
corresponding loss to PSTN carriers is as high as A$5.
While this sounds like
bad news for Telstra and its resellers, the news is not great for the IP
Telephony service provider either. Telsyte points out that despite the 500 per
cent subscriber growth (a great headline number but off a miniscule base), the
VoIP service providers aren't making any money either.
Well that's probably no surprise. It's doubtful any VoIP
providers anywhere are making any money out of the industry at the present. The
activity now is driven by long-term forecasts that players might, just might be
able to make a living off their subscriber base in the future - might so long
as that base is big enough.
The good news is that according to the numbers crunched at Telsyte;
those subscribers are there for the taking. It estimates that the market will
enjoy a ten-fold expansion in both terms of users and revenue in the next five
years. Unfortunately, you have to buy the report to get the actual numbers.
This growth ought to come predominantly from the consumer segment,
which Telsyte estimates will outpace business users by 50 per cent.
This will be driven, says the researcher, by increased
residential broadband adoption, falling VoIP equipment prices, and improved
VoIP service quality, features and ease of use.
On the downside, Warren Chaisatien, Telsyte Managing Director explains that: "Barriers
to the adoption of VoIP include poor call quality arising from the lack of integration
and consistency among IP networks. There are also issues with a lack of service
standards, full disclosure of VoIP functionality and number portability.
While VoIP is adding new billable minutes to an otherwise
flat voice market, its revenue will not grow fast enough to offset the rapid
decline experienced by PSTN and mobile. This is shrinking voice revenues by 2
per cent overall per year between now and 2010.
This effect is compounded by "nonpaying" VoIP users which
Telsyte estimates will outnumber their "fee-paying" counterparts by at least
3-to-1.
The opportunity, says Chaisatien, is to entice these free VoIP
users onto paid service accounts by cooperatively addressing barriers to
adoption offering better features and increased service quality.
Peering arrangements will be key to address these current limitations
and stimulate market growth in this sector, says.
Meanwhile; "PSTN carriers have no choice but to join the
VoIP bandwagon. Having 80% less revenue is still better than having none at all,"
says Chaisatien. "Mobile operators still have time to breathe since commercial mobile
VoIP is not expected until the end of the decade."
Overall, Telsyte recommends VoIP service providers will only
achieve long-term success if they pursue converged solutions and value-added
services.
Voice services, whether traditional or IP-based, are quickly
commoditised and "allyou-can-eat" bucket plans for VoIP are expected within 18
months.
According to Telsyte, value-added and converged solutions
will be critical to retain customers and maintain revenue. "To survive, service
providers must aim to make money outside of pure voice services, and deliver
VoIP as part of a larger unified communications suite," said Chaisatien.
"In the business market, ICT convergence services -
including solutions integration, network and security management, and SLAs -
are obvious growth areas.
"For consumers, value add will come from the delivery
of personalised unified communications that include mobile, email/IM, video/TV,
and other content," said Chaisatien.
"However, these services will rely on the
availability next generation, highspeed broadband networks," he said.
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