Impact of VoIP Bypass on International Calling Gradually Diminishe

Global North America, Central America, the Caribbean, Latin America, Europe, Asia, Africa and Oceania.

Insight Research: While the bite being taken out of traditional international voice revenues by Voice over the Internet Protocol (VoIP) will continue growing, VoIP bypass revenues will become a smaller percentage of overall international voice revenue,. As international settlement rates between carriers are brought into line with costs, the attractiveness of VoIP as a substitution for traditional phone calls will diminish, slowing down its adoption and making VoIP bypass a relatively smaller percentage of all international voice traffic, the study concluded.

International VoIP revenue will reach $84 billion this year, representing about 28 percent of international voice traffic revenue. By 2011, VoIP bypass of international voice traffic is expected to hit $96 billion, or just over 22 percent of international voice traffic. With the margins on all types of voice calling continuing to decline, telecommunications hardware and software vendors are unlikely to see the service providers substantially increase their CAPEX budgets, the report says. Everyone assumes that VoIP calling is going to quickly overwhelm circuit-switched calling, but the reality is that the displacement of TDM with VoIP will take longer than many imagine. Don’t get me wrong: VoIP will rule at the end of the day. But once international rates are in line with the actual service delivery costs, the arbitrage opportunity becomes less compelling, VoIP bypass adoption rates slow and actually become a smaller percentage of all international calls. Forecasts access line growth and wireless subscriber growth, analyzes data on MOUs related to international circuit switched voice and VoIP traffic, and forecasts the VoIP MOUs and associated revenue as well as revenue per subscriber. VoIP’s impact on capital investment in hardware and software is also quantified. Data is provided for the major economies in North America, Central America, the Caribbean, Latin America, Europe, Asia, Africa and Oceania.

A free report excerpt, table of contents, and ordering information is online at http://www.insight-corp.com/reports/intliptele.asp

North American Telecom, International Telecom, and VoIP: A Global Market Perspective 2005-2011” Publ 20050520