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Last Updated: Feb 18th, 2008 - 14:39:01 |
VoIP in Developing Markets
The development of VoIP is very market-specific. In countries like the United States and Japan, it is being adopted rapidly. For instance, VoIP has become a major service in Japan, which is leading the world with more than 9 million customers.
Asian market presents a different picture. No consumer VoIP service is available in Singapore. But mainly in the developing countries, China presents a picture of hope and encouragement for VoIP.
China will have more than 80 million PC-to-PC Voice over Internet Protocol (VoIP) users and more than 28 million VoIP phone users by 2008, market research firm iResearch said in a new report.
The assumption is based on the optimistic premise that the Chinese government will open or partially open the VoIP market in the near future. Although VoIP will turn out to be a huge market, it is hard to predict when VoIP businesses will bring huge revenues to operators.
The Ministry of Information Industry (MII), China's top telecom regulator, has yet to officially classify VoIP services as either a telecom service or as a value-added telecom service. If VoIP services were classified as a telecom service, only licensed telecom operators would be able to offer VoIP services in China. If it were classified as a value-added telecom service, a much larger number of companies would be able to provide the service.
In addition, Phone-to-phone and PC-to-phone services are the only IP telephone services officially recognized by the MII under the ministry's Telecom Services Classification Catalog. Consequently, although a number of companies offer PC-to-PC VoIP calling in China, Chinese authorities do not officially recognize these services.
The uncertainty of policy is a major concern for the development of VoIP in China.
As the result of higher penetration rates for PCs and internet use in China, the number of PC-to-PC VoIP users has increased steadily, exceeding 19 million in 2004. iResearch expects the number of PC-to-PC VoIP users to growth 52.6% year-on-year in 2005, reaching 29 million users. By 2008, the number of PC-to-PC VoIP users will surpass 80 million, iResearch predicted.
Interconnection is also problem that may hinder development of the VoIP market in countries like China and India. Because Chinese and Indian consumers are very price sensitive, the most widely used VoIP services today are free PC-to-PC services rovided by internet instant messaging services such as Microsoft MSN, Tom-Skype, and Tencent QQ. However, these free PC-to-PC services each have their own protocols that stand as obstacles for greater interconnection, which is required for greater popularization of VoIP services.
The low cost of VoIP services and their subsequent impact on the profitability of telecom operators is another issue that has hindered the growth of VoIP in China.
The future of VoIP services in developing countries like China and India will be IP calling over broadband. Phone-to-phone VoIP via broadband is already widely used in the U.S., but is rarely used in China due to the high cost of telephones needed to place VoIP calls over broadband. As the price of these telephones drops, VoIP over broadband should become more and more popular.
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