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What Global VoIP Usage Can Teach Us

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What Global VoIP Usage Can Teach Us

February 28, 2014

  By Mae Kowalke, TMCnet Contributor

Up to 15 years in prison for using voice-over-IP (VoIP) will certainly discourage its use, yet that is exactly the policy that Ethiopia struck in 2012 when it made headlines by making unauthorized use of VoIP a jailable offense.

VoIP is not having the same success in all parts of the world, and there are a number of reason why. Looking at how difference countries have embraced or rejected VoIP can be instructive.

First, the market opportunity. The global VoIP service sector is expected to grow by a compound annual growth rate of 6.46 percent globally through 2017, according to WhichVoIP. At that pace, the VoIP service sector will account for $82.7 billion over the next three years. Mobile VoIP applications should generate $36 billion in revenue by 2016, and as of 2012 roughly 34 percent of the total 490 billion minutes of global voice traffic came from VoIP. This number will only increase as VoIP becomes the standard for calling.

Yet, not every country is doing so well with VoIP. Ethiopia aside, even countries such as the United States could do better. While the U.S. has the most VoIP subscribers of any nation at 32.09 million as of 2012, according to WhichVoIP, it suffers from a low percentage of VoIP adoption among broadband subscribers—only 30 percent.

“If the growth of VoIP in the USA continues to be outpaced by other nations, it will eventually feel the burden of lagging behind in this critical communications technology,” noted WhichVoIP in a statement.

Countries that the U.S. should watch include France, Japan and India. Each is a VoIP leader for different reasons, all which point the way for countries that want to keep pace.

In France, one in every three people uses VoIP. This is because the incumbent telecoms in the country quickly embraced the technology, establishing industry champions. As a result, 90 percent of broadband users now use VoIP. Incumbent telecoms could learn from this trick instead of having their lunch eaten by over-the-top firms such as Skype (News - Alert) and WhatsApp, and governments could help nudge incumbents in that direction.

France also has benefitted from a strong broadband infrastructure, which is also the key for Japan. Large investments in both national broadband and cellular data networks have given Japan some of the highest quality VoIP in the world, no surprise for a country known for its tech. Other countries could learn from this lesson: Infrastructure, infrastructure, infrastructure. Commerce and VoIP in particular needs the foundation to grow, something both Japan and France have done exceedingly well.

But even if the infrastructure is not in place, countries can still grow their VoIP penetration by establishing polices and regulation that support growth. This has been the key for India, which has exceedingly poor infrastructure but has become a VoIP leader by championing the technology and making it easy for businesses and individuals to adopt VoIP. Of all the countries in the world, India has the fastest VoIP growth as a result. Other countries can benefit from seeing what a light hand can do for adoption (here’s looking at you, Ethiopia).

Taken together, a quick survey of VoIP globally highlights three factors that can boost growth: Adoption by incumbents, good infrastructure, and a positive regulatory environment.

Countries would be wise to pay attention to these factors.

Edited by Alisen Downey
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