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VoIP- Why we Need it & Why It Spells Doom for Telcos

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VoIP- Why we Need it & Why It Spells Doom for Telcos


What is VoIP or Voice Over Internet Protocol?

VoIP is described in Wikipedia as ?Voice over Internet Protocol?(VoIP) is a methodology and group of technologies for the delivery of?voice communications?and?multimedia?sessions over?Internet Protocol?(IP) networks, such as the Internet. Other terms commonly associated with VoIP are?IP telephony,?Internet telephony,?voice over broadband?(VoBB),?broadband telephony,?IP communications, and?broadband phone service.”

If you are using Skype or Viber, then you are using VoIP, and you are not only saving money, but you are also costing the Telcos (Telephone / Communication companies) billions of dollars in revenue.

As millions and millions of people continue to use VoIP in chatting and talking with their friends and loved ones across the continents, more than US$ 400 Billion Dollars over the next 6 years will be saved and not be deposited in the coffers of your telephone service provider.


That’s a lot of money you might say.

Consider this…. a ten minute telephone call from Australia (using an Australian telephone service provider) to an overseas landline would be at least 6 times more expensive compared to a similar call made via Skype. A report published by Ovum Ltd, an ?independent analyst and consultancy firm headquartered in London, specializing in global coverage of IT, and telecommunications industries (Wikipedia)?, revealed that telcos are expected to lose approximately US$ 386 Billion Dollars due to the increasing practice of using internet based phone calls.

VoIP use is expected to rise by 20% hitting the 1.7 Trillion Minute level 4-5 years from now. This information is corroborated by other figures released by organizations like CHOICE, an ?Australian not for profit consumer organization, previously known as the Australian Consumers Association. It is a non-partisan organization that was founded in 1959 which researches and campaigns on behalf of Australian consumers (Wikipedia)?.

CHOICE found that 51.2% of people surveyed uses VoIP to make phone calls.


In Australia, the leading VoIP tools used according to the CHOICE report are Skype, Viber, Google Hangout, PennyMobile Pro and FaceTime (Apple).

Tom Godfrey of CHOICE shared that telephone companies have long burdened consumers with expensive installation and connection fees and that VoIP ?offers people relief from the potentially unnecessary fixed line services that have seen consumers ringing up big bills before they have even made a call.?

He adds that ?While there are a number of variables that can compromise reception including internet congestion, call quality for users of VoIP has improved, with the Australian Communication and Media Authority claiming VoIP reception can now be superior to landlines.?

The rise of VoIP use can be partly attributed to the increasing availability and improving speed of broadband internet services.


Emeka Obiodu, an analyst at Ovum Ltd., opines that attempts by telcos to limit or compete with VoIP would be fruitless unless they are able to find a solution to the costs passed on to consumers.

She added that, ?Unfortunately, telcos must learn to live with this reality; the use of VoIP will grow increasingly over the next five years to become the underlying technology for delivering voice over telecoms infrastructure.?


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