VoIP not yet saviour of PSTN providers

Despite recording 500 percent growth, VoIP revenues across Australia are not yet sufficient to cover the massive decline in telco voice revenues.

That’s the view of research outfit Telsyte which has just launched its inaugural annual report into the local VoIP market.

‘The Australian VoIP Market, 2005-2010’ found that PSTN carriers currently stood to lose $5 in service revenue for every $1 made by VoIP.

While VoIP was adding new billable minutes to an otherwise flat voice market, its revenue would not grow fast enough to offset the rapid decline experienced by PSTN and mobile, Telsyte MD Warren Chaisatien said in the report.

This would result in an overall voice market that will shrink by 2 percent per year between now and 2010.

“PSTN carriers have no choice but to join the VoIP bandwagon. Having 80 percent less revenue is still better than having none at all,” he said

With ‘all-you-can-eat’ bucket plans for VoIP expected within 18 months VoIP service providers were urged to pursue converged solutions and value-added services, which hinged on next generation high-speed broadband networks, Chaisatien said.

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.

“In the business market, ICT convergence services – including solutions integration, network and security management, and SLAs – are obvious growth areas,” he said. “For consumers, value add will come from the delivery of personalised unified communications that include mobile, email/IM, video/TV, and other content.”

However, these services would rely on the availability next generation, high-speed broadband networks, he said. With the number of non-paying VoIP users currently estimated to outnumber their fee-paying counterparts by at least 3-to-1, persuading end-users to pay for VoIP services would also be another challenge.