European International VoIP Bypass Calls Top $31 Billion in 2005

Europe

Insight Research: International callers from Europe will spend more than $31 billion on Voice over the Internet Protocol (VoIP) bypass this year. Since EU telecommunications companies have brought their international rates into line with actual costs, the attractiveness of VoIP as an arbitrage opportunity has already peaked and will gradually diminish. Thus, VoIP bypass will become a smaller percentage of all European international calls by 2011. According to the market analysis study, “,” in 2005 VoIP bypass calling revenue represented almost one-third of the $100 billion spent in Germany, France, the UK, and other European countries on international calls. By 2011, VoIP bypass is expected to account for only $43.8 billion out of some $151 billion spent on international calling. Of the estimated 94.3 billion European international calling MOUs generated in 2005, nearly 31 percent will be attributable to VoIP bypass; by 2011, VoIP as a percent of all European international calls will drop to 28 percent. Once international settlements are in line with the real costs to deliver service, arbitrage opportunities like VoIP bypass become less compelling. Take Russia, the exception in Europe: in 2005 international calling revenue is expected to amount to $3 billion, of which $2.1 billion was lost to VoIP bypass. Because we don’t see Russian rates coming in line with real costs any time soon, we expect that VoIP bypass will remain upwards of 50 percent of all international calling revenue in 2011. Telecommunications and VoIP in Europe and Africa: A Market Perspective on the Major Economies 2005-2011 Publ 20050606