Downturn busting VOIP to herald end of traditional telephony

VoIP to be reap £13.5 billion worth of global revenue by 2010 threatening fixed line services' future

The VoIP (Voice over Internet Protocol) sector will continue to grow over 2008 despite the global downturn, according to new research by business and financial analyst Grant Thornton.

The firm predicts that as telcos and IT companies battle it out, the market will reap £13.5 billion worth of global revenue by 2010. It adds that migration from fixed line to mobile and VoIP services will increase exponentially over the coming years and result in a raft of consolidation in the sector through 2008, signalling the death knell of traditional telephony.

Sarika Patel, head of technology at Grant Thornton, claims that the doubling of the VoIP customer subscriber base in 2006, and four-fold in the last two years, is merely one reason why the VoIP worldwide customer base will top 250 million subscribers in two years.

Patel stated that the key drivers for VoIP uptake over the past 12 months have been improving technology solutions and enhanced ability for ISPs to cater for VoIP calls in the uptake in the technology. She commented, "VoIP is no longer next generation telephony, it is here now, and 2008 should see strategic acquisitions of independent software developers and ISPs by large telcos looking to consolidate their VoIP offerings."

However, Patel also warned that there were still concerns regarding VoIP that needed immediate action in order to cement VoIP as the next generation of voice and video communication, in particular security.

She added, “Security remains a major concern. VoIP is more secure than it ever was, but  eavesdropping, viruses and fraud are still a threat. Currently, software encryption products are available, but it is inevitable that encryption will be integrated directly into VoIP systems in the near future. If this is successfully managed and brought to market, VoIP will garner the confidence of business and uptake will jump."

For Grant Thornton, other concerns include quality of service issues, reliability, scalability and the development of sensible industry regulation.





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