TELECOM Digest OnLine - Sorted: Web Calls May Be More Popular Than Thought - Survey

Web Calls May Be More Popular Than Thought - Survey

Lisa Minter (
Thu, 4 Nov 2004 14:09:47 -0600

AMSTERDAM (Reuters) - Making cheap telephone calls over the Internet
could be much more popular among consumers than previously
estimated, leaving incumbent telecom service providers highly
vulnerable, a survey revealed on Thursday.

Over 50 million western European consumers with a broadband
Internet connection at home may use telephony software and special
phones by 2008, British research group Analysys found.

"The impact on traditional telephony providers' revenues could reach
6.4 billion euros in 2008, representing 13 percent of the residential
fixed-line voice market," said analyst Stephen Sale, adding this was a
worst case scenario drawn up for operators who want to know how badly
they can be hit.

Previous estimates forecast that up to five percent of revenues could
be eaten away by Internet telephony.

Voice over Internet Protocol (VoIP), as Internet telephony is
officially known, has become popular among consumers in the last year
thanks to free software from providers such as Skype.

Two weeks ago, Luxemburg-based Skype said it had reached the milestone
of one million simultaneous callers. Calls are usually made from
computer to computer, although Skype sells a service where PC users
can call normal phones at low per minute charges.

Skype and rivals like Popular Telephony are working with hardware
manufacturers like Siemens, Cisco and Plantronics to develop
VoIP-enabled home phones that plug into broadband modems.

This will open the way to call VoIP users -- at the moment this is not
possible, because VoIP users have to be online if they want to be
reached via the Internet.

It is creating a critical mass for rapid adoption, Sale said. Most
calls from home phones are made to a handful of friends and relatives,
and it is easier to convince a small group to move to Internet
telephony, than a large group.

Operators are divided over what they should do.

The chief executives of Deutsche Telekom and British Telecom, two
of Europe's top phone carriers, differed in their views on how to
counter the decline of their traditional fixed-line sales.

British Telecom's Ben Verwaayen said the telecoms industry has to
prepare for next-generation Internet networks. Kai-Uwe Ricke,
meanwhile, saw his voice telephony business threatened mainly by
mobile phones.

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