PracticeConsultingIP ‘phone services to ring up revenue

IP 'phone services to ring up revenue

According to a recent report by IDC, the economic downturn will result in a rise in IP telephony service revenue as there will be less of a "free telephony" culture within the service provider community.

End user spending on IP telephony services in 2001 amounted to $150m in Western Europe and is expected to increase to $2.4bn in 2006, representing a CAGR of 74% over the forecast period.

“Economic turbulence in the telecoms sector means that the opportunities offered by IP telephony services are featuring highly in the minds of service providers, said Nicky Walton, research analyst with IDC’s European Telecomms Service. “Increasingly, operators are seeking to capitalise on the expansion in Internet-related usage and the economies of scale offered by consolidating voice and data traffic on a common IP platform.”

International calls accounted for the highest portion of total IP telephony revenue in 2001, as this is the area where most significant cost savings can be offered to users. But by 2006 IDC estimates that long distance call tariffs will have declined, and revenue from enhanced services, such as messaging, conferencing and call centre services, will represent the majority (54%) of the total. This evolution is essential in order to maintain the overall viability of IP telephony services into the latter half of the decade.

IDC says the use of advanced IP telephony-based services will grow significantly and the larger business market will attract the major service providers, including PTTs. The use of IP phones within enterprises will also boost traffic for IP telephony service providers. Major players will emphasise quality of service and enhanced services – something business users would be likely to pay more for.

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