Who wins and who loses as phone calls move on to the internet?

Posted on December 6, 2004  /  1 Comments

The Economist Dec 2, 2004

…today almost all broadband connections in the world are fixed links provided either by telcos or cable companies. But in the next couple of years a handful of promising new wireless technologies, the best known of which is WiMax, will start to blanket large regions with broadband access over the airwaves.

This will be a huge boon to consumers, who will be able to bypass the broadband duopoly of cable and telecoms companies. It will also help the VOIP specialists by combining the benefits of VOIP with the convenience of wireless mobility (at least within regions with wireless broadband coverage). Vonage and others are already working with equipment vendors to make portable handsets based on short-range Wi-Fi technology, for use within homes and offices. These should be available next year. WiMax handsets could follow in 2006. If he can keep his lead until WiMax arrives, says Mr Citron, he could leave his cable and telco rivals in the dust.

Who will be the biggest losers? Not the fixed-line telcos, even though their revenues may fall by 25% by 2010 due to VOIP, according to Mr Mewawalla. The mobile operators are likely to be the big losers, with their revenues plunging by 80%. Together, VOIP and wireless broadband could fatally undermine their costly third-generation (3G) networks.

In short, VOIP upends the entire telecoms landscape. As consumers flock to make cheap calls over the internet, a whole industry must find ways to turn VOIP from a threat into an opportunity.

1 Comment

  1. I agree with you, mobile operators will be the most losers I think.