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The Changing Voice Market

The Changing Voice Market

Posted by Shara Evans in Market Clarity Newsletter 28 Jun 2006

28 June 2006


Welcome to the first issue of the Market Clarity newsletter. This short publication is designed to alert our colleagues and customers to new research and Market Clarity news. In addition, we will provide regular feature articles giving an in-depth discussion of relevant Market Clarity research findings.


  • Feature Article: VoIP as an Internet Utility
  • Free Technology Guide: Demystifying Layer 2 and Layer 3 VPNs
  • New Research
  • Bite-Sized Bits


Feature Article: VoIP as an Internet Utility

You only have to look at Internet politics in the US to see how attached people have become to their Internet utilities: AOL’s proposal to offer premium-priced preferential treatment for some outbound e-mail generated a storm which hasn’t died down yet (such things already exist in Australia, and have done for at least a few years, but nobody seems to notice).

VoIP has arisen as a business model almost by accident. Because it wasn’t one of the “original” utilities of the consumer Internet (web access, file transfer, email and so on), VoIP has been the focal point of an emerging business model.

To what extent it will survive as such is another question. What if VoIP, like e-mail and Web access, and for that matter the “free 50 Mbytes personal Webspace” with the broadband access account, became just another one of those Internet utility services that ISPs have to offer?

Certainly there’s enough competition between ISPs to justify the notion. And there’s also plenty of evidence that it’s already taking place.

Market Clarity has what we believe is the most extensive list of broadband providers and VoIP providers in Australia. Many analysts blithely accept that there are perhaps 200 or 250 ISPs here; we have identified nearly 500 ISPs, and we visit them regularly to ensure that they’re still active.

We also know of more than 185 VoIP service providers of different kinds in Australia which we follow with similar diligence.

It should come as no surprise to anybody that these two directories show a substantial overlap: the majority of VoIP services now offered in Australia are available from ISPs, sitting alongside their access, e-mail, Web space and other bundled services.

At the beginning of June 2006, Market Clarity had identified 141 companies offering retail VoIP services in Australia to consumer and business customers. Of those, there were 79 selling VoIP alongside other services, most often Internet access. There were only 45 VoIP providers in Australia for whom VoIP was the sole business (we will soon be releasing a research report based on year-end statistics).

For an ISP, VoIP services have a natural attraction. They use familiar infrastructure, and the ISP is close (in network terms as well as relationship terms) to its customer.

VoIP is also attractive because it can help address churn by associating that customer’s VoIP number with the ISP’s service.

This has serious implications for VoIP as a standalone business case. Just as VoIP providers say “why pay for the phone call when we can give it to you for free?”, the ISP can say “why pay for a VoIP account when we can give it to you for free?”

Market Clarity would also expect that ISPs will begin seeking out, and recommending, DSL modems that integrate the ATA, so that new customers can start using the ISP’s bundled VoIP service with no device configuration whatsoever.

VoIP as an Internet utility would be a great value proposition for the consumer, but it will be a very unwelcome development for the pure-play consumer VoIP industry.


Free Technology Guide: Demystifying Layer 2 and Layer 3 VPNs

This Technology Guide is designed to give readers a pragmatic understanding of the technologies used to deliver WAN services.

With a growing number of telecommunications carriers and service providers now offering Layer 2 and Layer 3 network services, Australian businesses have an unprecedented opportunity to achieve a perfect fit between their needs and the services they purchase.

At the same time, however, customers need to have a good understanding of their business requirements, the applications their networks need to support, the costs associated with different services, and the ROI available from the right choice of service.

In this publication, Market Clarity presents a description of the behaviour and application of Layer 2 and Layer 3 VPN services, and analyses the technical and business features associated with these services.

To ensure readers gain a balanced understanding of the choices available to them, we have included legacy services such as ATM and Frame Relay (which still play an important role in the delivery of high-reliability WAN services), as well as Ethernet, VPLS, IP+MPLS, Private IP, and IP-VPNs using the public Internet.

We also present examples of how the interactions between different business requirements, different application behaviours, and different legacy network requirements can impact the choice of new WAN services.

This Technology Guide was made possible by the kind sponsorship of Nextgen Networks.

This 54-page Technology Guide includes 5 Tables and 21 Figures. The Technology Guide is available here.


New Research

The first half of 2006 has been an extremely busy time for Market Clarity, with the publication of four major research reports covering hundreds of pages of information on Australia’s telecommunications market.

So we thought it was about time to blow the trumpet. We truly believe the Market Clarity Demographics and Forecast series of publications to be the most comprehensive and detailed study ever published into Australia’s telecommunications industry.

Now available from Market Clarity are the following:

Australian Mobile Voice and Data Services: 2000-2010
This report includes information on SIOs, call minutes and SMS volumes, revenue and customer numbers for all carriers and technologies, with demographic service history from 2000-2005 and forecasts through 2010.

Australian Fixed Voice Services: 2000-2010
Basic access lines, call volumes, revenue — every aspect of the fixed voice market is covered in this detailed study, with demographic history to 2005 and forecasts through 2010.

The Australian VoIP Services Market: 2004-2011
This report covers both the Consumer Internet-based VoIP services market, and the Business non-Internet IP Centrex market, providing historical analysis since 2004 and forecasts through 2011, with 16 Figures and 6 Tables covering revenue, service ends, and growth forecasts for paid Consumer VoIP services, free Consumer VoIP services, and hosted IP Telephony services.

New: Australian Data Services: 2000-2010
This report covers retail and wholesale markets for all the key technologies used in Australia’s data services market, including emerging services such as IP/MPLS, Ethernet and Dark Fibre, as well as traditional data services like Frame Relay, ATM, Leased Lines and ISDN. Forecasts are provided to 2010, with historical data specific to the each service type.


Bite-Sized Bits

Not every budget will stretch to the price of an entire demographics report. Market Clarity is now offering a new service, “Bite-Sized Bits”, in which research customers can drill down to specific data sets from any of the above research reports.

You might be looking to understand the relationship between the fixed voice market and the mobiles industry. Rather than buying the two reports, just a couple of Bite-Sized Bits might fill your needs.

Bite-Sized Bits are available at $500 (ex-GST) for each data set. Each Bite-Sized Bits purchase includes a table from the report, along with the figures based on that table and the associated Market Clarity commentary from the report. We also provide analyst telephone support for each purchase, allowing Bite-Sized Bits customers to fully understand the interpretation and context of the information they purchase.

Should you later wish to purchase the full report, the cost of your Bite-Sized Bits purchase will be deducted from the purchase price of the source report.


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