New Study: ISPs Push Into Voice Market
Study demonstrates strong and accelerating adoption of VoIP by ISPs
Sydney, AUSTRALIA – July 6, 2006 – Internet service providers are increasingly launching into the voice services market, according to a new study by independent Australian telecommunications research firm Market Clarity.
The study, ISPs: The New Vanguard of Retail Voice Services, covers 245 companies offering voice services in Australia at the end of June 2006, and found ISPs now comprise more than 28% of the voice services market. Internet access is also the service most likely to be associated with voice services, with 161 voice providers offering Internet services.
Australia’s VoIP service provider market is also much larger than is generally realised: Market Clarity has identified 169 retail VoIP services and 42 wholesale VoIP services from a total of 182 VoIP service providers.
“Analysts and commentators have significantly under-estimated the number of companies entering the VoIP market in the last two years,” explained Market Clarity’s founder and CEO, Shara Evans. “This study demonstrates a very strong and accelerating adoption of VoIP by ISPs.”
Evans attributes this in large part to the launch of wholesale VoIP services in the last 12 to 18 months, which simplifies the retail providers’ process of implementing and offering VoIP services to consumers.
However, VoIP is not the only string to the ISP’s bow. ISPs also have a strong presence in the PSTN market. As a result, nearly 37% of companies offering PSTN voice services are ISPs.
“The growing number of ISPs offering voice services suggests that the industry is looking beyond its traditional base of Internet utility services, and is looking to reduce churn by commanding more of their customers’ telecommunications spending,” Evans said.
“The number of ISPs now known to offer voice services represents more than 29% of the 547 ISPs tracked by Market Clarity,” she said.
This may also represent a serious competitive challenge to pure-play VoIP providers, who cannot draw on other revenue streams to cross-subsidise their services.
The report also indicates little crossover between mobile and VoIP providers. While the sample of 245 providers included 64 companies offering mobile services, there is a relatively low overlap between mobile services and VoIP services.
The fast growth of the VoIP market poses a challenge for regulators, however, with VoIP providers still lagging behind the voice services market in their membership of the mandatory TIO scheme.
Only 60.4% of VoIP providers are members of the TIO scheme, the study finds, compared to 86% of PSTN providers and 84.4% of mobile service providers.
“The TIO is a key plank in telecommunications consumer protection,” Evans said. “Providers themselves are also risking a regulatory response by ignoring or resisting their regulatory obligations.”
Market Clarity found that there are 61 companies in the sample of 245 whose business activities include reselling carriage services (for example, VoIP service providers offering low-cost PSTN termination) who qualify as “regulatory refuseniks.”
ISPs: The New Vanguard of Retail Voice Services – An Overview of the Supply Side of Voice Services, is available now from Market Clarity. The report analysed the activities, services and regulatory status of 245 companies offering voice services in Australia. This 42-page report costs $995 (ex-GST), and includes 21 Figures and 11 Tables.
About Market Clarity
Market Clarity is an award-winning telecommunications analyst firm founded in January 2006 by leading Australian telecommunications researcher and strategic consultant, Shara Evans. The firm covers all aspects of telecommunications, including traditional and converged services and technologies. Market Clarity’s extensive databases of technical and market information cover a wide range of facts and figures on the technologies and services that are shaping the Australian telecommunications market. Market Clarity’s GIS tools and research databases enable the correlation and presentation of highly complex information in an intuitive geographic (map) format.
Market Clarity’s insights are derived from a deep understanding of technology, coupled with comprehensive research, which examines each segment of a service’s value chain as well as underlying population demographics. By leveraging its engineering knowledge with an ongoing primary research program, Market Clarity provides insight, intelligence and advice on all aspects of the Australian telecommunications market including traditional, converged and future technologies. Market Clarity’s unparalleled market knowledge and research databases are brought to all consulting engagements.
Market Clarity’s contribution to telecommunications in Australia was recognised by the telecommunications industry’s peak body, the Communications Alliance, which awarded the company its 2007 ACOMMS award for Services to the Industry – Professional Services.
Market Clarity is headquartered in Sydney, Australia.