The VoIP Revolution Is Here

May 12, 2015

It is not just a problem, it is a multi-billion-dollar problem as Fortune magazine describes it; that is the impact of the growth of Voice Over IP (VoIP) applications like Skype, WhatsApp, Facebook Messenger and many others over the telecom companies voice services.

The margin of profits used to be comfortably guaranteed through the charges of the per minute voice calls is thinning under the weight of the flat rates of the broadband data bundles usually provided by telecom providers.

According to Ovum, a London-based research and analytics firm, as reported on Fortune back in June 2014, consumer use of VoIP will grow at a compounded annual rate of 20 percent between 2012 and 2018 to reach 1.7 trillion minutes. Translated to monetary value, that would be equal to around $386 billion in lost revenue in that period, with $63 billion in the final year of the forecast.

“The use of VoIP will grow increasingly over the next five years to become the underlying technology for delivering voice over telecom’s infrastructure,” according to Ovum.

The move toward VoIP technology is getting intense. WhatsApp recently rolled out its VoIP services and it is now active for Android users (according to some reports, one of the local companies is already banning the use of the service) and Facebook just rolled out its video chat for Messenger, and in the first two days of the service, Messenger users made over one million video calls. Noting that the service was made available in 18 markets only, including the UK, France, Greece, Mexico, Portugal and the United States, with more markets planned to come soon.

“We’re very happy with the progress,” Stan Chudnovsky, Facebook Messenger’s head of Product, told Mashable. Messenger VoIP calls are already a huge success on Facebook, it was introduced April of the last year and now count for more than 10 percent of the worldwide VoIP traffic.

Wherever telecom companies look, they are losing ground, people are no longer using phones as they used to do, to talk or text (in the traditional SMS way at least!), everything is done on the Internet now. They talk, they text, they share, they generate content and consume it. The real challenge for these companies to stay relevant in the market is to ride the wave and make sure that their networks are ready to handle this boom in traffic, the upload and the download. Then, they could start thinking about moving from the classical business model of being telecom providers to information technology players.

Everything is about services and solutions now. Consumers will be looking for companies that are integrative to their lifestyles, not the ones standing in their way banning this and blocking that. The government regulator is part of this as well. Along with the telecom companies, they need to be proactive, not reactive.

The pace of change on how people are consuming and exchanging data is very fast and even unpredictable, and everyone has to be ready.

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