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RealTime IT News

Report Warns of Net Telephony Challenges

Internet telephony presents a major challenge to telecom operators' current business model, according to a report from British telecommunications consultant firm Analysys Ltd.

The report, entitled "Commercial Strategies for Internet Telephony," profiled companies now entering the telephony markets, and discussed critical issues facing incumbent operators, new entrants, Internet Service Providers (ISPs), cable TV operators and IT vendors.

The report predicted that telephony could take 36% of the online market on key international routes by 2003, and offered advice to firms on how to deal with the growing industry. Companies can ignore it and risk having to buy up the competition later; they can join the competition now and gain early market share; or they can move up the value chain by exploiting the value-added aspects of Internet telephony, the study explained.

"For established operators that own and operate circuit-switched networks, a major barrier to their entering the Internet telephony market is the potential to cannibalise their traditional revenues and profits from existing services," said Margaret Hopkins, author of the report.

A recent report by SRI consulting noted that telephony will be a $9 billion business by 2002, which may quell the fears of some hesitant participants.



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