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siptel takes positive steps to reduce carbon

June 2010

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siptel selected for new Avaya Service Expert status

May 2010

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siptel gains ISO 9001 certification, hot on the heels of “Investors in People” status

April 2010

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siptel is finalist in two categories at the European IT Excellence Awards 2010

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siptel awarded coveted “Investors in People” status

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December 2009

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Global PSTN voice revenues set to tumble

Global PSTN voice revenues are set to diminish significantly over the next four years as incumbent telcos switch to VoIP.

That’s according to IMS Opportunities and Challenges, a new report from Informa Telecoms & Media, which estimates that PSTN voice revenues will decline to $500 billion by 2011, representing a slide of 16.7% or $100bn from the total revenues at the end of 2005.

According to analysts, fixed line operators are still hanging onto their PSTN networks because traditional voice services remain the main revenue generator for them, but this gradual decrease in revenues will force operators to take action and deploy more efficient networks.

In 2005 operators made almost $600bn from PSTN voice services, while broadband services accounted for only 25% of total revenues. These falling PSTN revenues are a key driver for IMS as operators benefit from deploying VoIP over broadband, over the same period, 2005-2011 total broadband revenues are expected to reach $410 billion from $202bn.

In developed regions like Japan, South Korea, Western Europe, and North America, the decline will be even more pronounced due to the tough competition surrounding the fixed voice communications market from mobile phone third party service providers who use VoIP at the core and PSTN at the edge of the network, and now increasingly from VoIP providers such as Vonage or Skype.

In Japan, Informa expects to see revenues from PSTN voice declining at an average rate of 7% year on year, while Japanese operators are expected to make more revenue from broadband services than PSTN for the first time in 2010.

In Western Europe and North America, incumbent PSTN are forecast to lose over $201bn and $114bn cumulative revenues respectively from PSTN voice over the period 2005-2011. In these regions, broadband service revenues are expected to exceed these of PSTN voice by 2009 or soon after.

Report author, Malik Saadi, stated: “After 2010, PSTN will no longer be the main revenue generator in developed countries, there will be no justification for big operators to reserve a whole network for traditional PSTN voice traffic. This trend will increasingly push operators and network owners to gradually migrate their subscribers from traditional PSTN to VoIP, it will force them to take action by deploying more efficient networks such as IMS based systems.”

VoIP by itself may not justify the deployment of IMS, but the increasing profits from broadband access and data services may well form the basis for IMS deployments enabling blended added value services to VoIP.

Operators will be able to offer a range of incremental services to their subscribers such as caller ID display over heterogeneous devices, personalised ringtones and ringback tones, presence, picture, video, or other content sharing while calling, video calling, voice and videoconferencing. Subscribers of VoIP could also reach their account from any location in the world by connecting through the portal of their service providers.

Saadi added: “Of course traditional telephony operators risk cannibalising their core business through offering cheaper voice services over IP, although they will likely lose out to competitors such as Skype, Vonage, Yahoo, or Microsoft if they do not jump on the bandwagon.

“A number of incumbents worldwide including Telenor, British Telcom, France Telcom, Telecom Italia, Verizon, NTT and many others have already shown interest in gradually migrating their subscribers from PSTN to VoIP in an attempt to avoid churn.

“Despite its reputation as a disruptive technology, VoIP is expected to be a main area of growth for the broadband market over the next five years, with a potential 21% penetration of broadband market by 2010.”

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15/5/06

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