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VoIP Will Ease Economic Pain

TMCnews Featured Article


March 10, 2009

VoIP Will Ease Economic Pain

By Jessica Kostek, TMCnet Channel Editor


The current direction that Voice over Internet Protocol (VoIP) is taking is believed to help the current economic crisis according to IBISWorld. In a recent study released this week, IBISWorld predicted the impact of the current recession on the VoIP industry will be positive and that “this emerging industry has one distinctive advantage over competing industries and firms; price.”

 
Most everyone knows the advantages that VoIP services can offer and right now all that matters to anyone who lives on planet Earth is money. It’s what makes the world go round and despite various arguments money does and potentially can make you happy. It’s ALL about the Benjamin’s now folks.
 
In a related article, TMC Erik Linask (News - Alert) states, “Certainly, there have been many VoIP deployment horror stories, but for each one, it’s safe to say there are now many success stories that have driven VoIP adoption in both business and residential markets.”
 
By using VoIP, local, long distance, and international calls are substantially cheaper using than those made on wired and wireless networks, attracting more business and personal use in a deteriorating economic environment, according to IBISWorld.
 
“VoIP has grown up,” Ravi Sakaria, president and chief executive officer of VoicePulse, told TMCnet during an interview at the Internet Telephony Conference & Expo. “You can see it here. For the first time, the exhibitors know what their business models are. Everybody has a viable model now, and if you ask, ‘Who is your target?’ or ‘What is your revenue structure?’ – everybody knows. People are out there exhibiting products, not exhibiting ideas and reference designs. People out there are putting out stuff that you can actually purchase or sign a contract for today. They have the right materials. It’s a very focused show.”
 
Based on IBISWorld’s research, “Consumer migration to VoIP will boost revenue but the higher cost of funding will result in an earlier than expected shakeout of industry participants. IBISWorld expect enterprises to fall by 18 percent in 2009 compared to a February 2008 forecast of a 6.3 percent increase.”
 
Although, most small VoIP providers were already running their businesses on extremely thin ice when the economy was performing well, these firms will obviously be the first to go. IBISWorld anticipate margin decay in 2009 followed by an increase in 2010. But overall, IBISWorld predicts that the industry will benefit from some consolidation while the weaker economic conditions will serve to boost demand in the short to medium term.
 
However, IBISWorld reports revenue growth over 2009 and 2010 will be stronger than previously projected with an anticipated acceleration of consumer and business substitution from wireline services to VoIP. Revenue growth is expected to slow from 2011 as the financial pressures motivating substitution ease and the industry takes stock.







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