Fear Drives VoIP in Telecom

September 21, 2005

Is the main reason more telecom companies are switching to VoIP the cost savings?

The convenience?�

Efficiency?

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No.

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The main reason that more companies are switching to VoIP, according to a report by Heavy Reading, is fear.�

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Of more than 175 carrier professional surveyed, the single biggest reason for VoIP deployment is “fear that traffic would otherwise migrate to competitors’ networks,” Heavy Reading senior analyst Graham Finnie told TechWeb.�

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More than half of the respondents said more than half of their voice traffic would be IP by 2007.�

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More than three-quarters of those surveyed said their company had already deployed VoIP in some part of its network; within 12 months, that figure will rise to almost 90 percent.

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See below for TechWeb’s report on the VoIP-in-telecoms survey.�

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Fear Driving Telecoms to VoIP, Says Survey�

Tue Sep 20, 4:20 PM ET��

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MANHASSET, N.Y. — Global telecom carriers are accelerating their plans to offer Internet-based VOIP services for fear of losing critical business to competitors, according to a report by Heavy Reading.�

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The report surveyed over 175 carrier professionals representing more than 130 network operators worldwide, including AT&T, BellSouth, BT Group, SBC Communications, and Verizon Communications.��

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Over half the respondents said more than 50 percent of their voice traffic would be IP by 2007, the survey found, with relatively little difference expected between VoIP in core networks and in access networks.��

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More than three-quarters of survey respondents said their company had already deployed VoIP in some part of its network, and within 12 months that figure will rise to almost 90 percent. At the same time, over half of respondents said that less than 10 percent of traffic, in both access and core, was VoIP today-- and the proportion of customers with VoIP-enabled terminals or handsets was even lower.��

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"The single biggest reason for deploying VoIP is fear that traffic would otherwise migrate to competitors' networks," said Graham Finnie, Heavy Reading senior analyst and author of the report. "Not surprisingly, this view is especially true among incumbent telcos-- over three-quarters of incumbent respondents saw fear of traffic loss as important or critically important to their VoIP strategy."��

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The survey also noted that most network operators with softswitches deployed in their network have opted for integrated devices, although data suggests there will be a trend toward distributed softswitches in the next two years. Access media gateways are the most widely deployed VoIP network equipment today, and 84 percent of respondents expect to be using them within two years.��

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However, the highest growth in uptake of VoIP equipment is expected to be in media servers and session border controllers (SBCs) or other policy control equipment, the survey found.��