Voice Peering Forum Winter 2007 Kicks Off

At the Voice Peering Forum Winter 2007 conference the attendance is very good which indicates tremendous interest in this burgeoning market. So far it seems clear that Stealth Communications, the company behind this event has yet another successful conference under its belt.
Perhaps the best indication of how this market has evolved is the fact I am sitting in a session on wholesale VoIP meaning the Voice Peering Forum is not just about peering but has evolved to the point where it focuses on more general service provider topics – not just peering.
The session really focuses on international long distance growth and is being chaired by Stephen Beckert, Research Director at TeleGeography Research is speaking. Here are some of the session points worth noting:
  • Aggregate wholesale revenues are growing 2-3% annually while traffic is growing 20-30%.
  • The impact on carriers net is not as bad as on gross. The reason for this decrease is due to declining mobile termination rates.
  • Most regulators in Europe have set policies to lower rates and this will artificially constrain revenues.
  • There is slower traffic growth to and from mobile phones.
  • This is counterintuitive because mobile subscriber growth grows 20% annually.
  • Then again, much of the phone purchases in Europe are for second phones (SIM cards) meaning less traffic per phone.
  • In addition, the biggest mobile subscriber growth has come from developing countries like India, China Pakistan, Bangladesh, Nigeria etc, where ARPU can be $2 per month.
  • One third of international wholesale traffic is VoIP-based.
  • Skype had 14 billion minutes of international traffic in ’06 and ’07 according to TeleGeography Research
  • This is a huge amount for one company but not large compared to 300 billion minutes from major phone companies.
  • Skype is having a measurable impact on international carrier growth rates.
Service providers have much more complex challenges ahead of them and niches are harder to spot. Some incumbents with large retail customer bases will outsource their long distance.
This is a slow motion crisis, much better than 1999 when rates dropped rapidly. Service providers will begin to join forces and pool resources to reach the international market. There will also be more cost cutting which could be buoyed by voice peering.
The energy level at the conference is as high as any of these conferences I have attended and I am looking forward to keeping you informed of the latest news from the show. Stay tuned.

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