Report: Net to Dial Up $9 Billion By 2002

The Internet telephony industry will ring up $9 billion in revenue by the year 2002, through faxes, voicemails, and pages, but not through real-time voice conversations, according to a new study.

“Thanks to the economies of using Internet protocols for these applications, Internet telephony will grow to represent the equivalent of five percent of long distance calling minutes worldwide by 2002,” said Ed Christie, director of SRI Consulting Media Futures Program, author of the study.

“But because of the per-minute cost reductions, Internet telephony will make up only three percent of total long distance revenue,” added Christie.

SRI noted that telephony traffic moving to the Net will be made up of store and forward applications including faxes, voicemail messages, and pages. Unlike real-time voice, these services will not be as sensitive to transmission delays that occur in packet-switched networks, the company said.

The SRI study, “Market Perspectives: 1998,” projects Internet telephony will remain concentrated in North America, Europe, and Japan, where traffic and demand is heaviest.

The company said Internet telephony faces an uphill battle with regulators in developing countries, however, because the technology threatens to undermine a local-exchange carrier’s ability to recoup recent investment in network-infrastructure.

The report also forecasts growth in a number of other Internet-related areas, including high-speed residential data services, Internet on TV services, electronic mail, and mobile Internet access.

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