Although there is plenty of opportunity for voice-over-Internet services, it will remain a niche market, according to a Datamonitor report. The report concludes that although this alternative market does exert pressure on the traditional telecommunications market, problems with reliability will mean it remains unpopular with consumers.
Voice-over-IP (Internet Protocol) services are theoretically at a competitive advantage over the traditional PSTN (public standard telephone network) market in that they can offer cheaper call rates, a result of the Internet's flat rate charging structure. However Datamonitor concludes that the quality of these calls outweighs the savings, which can be up to 40 percent. This is down to the inability to reserve bandwidth or ensure quality of service, meaning that Internet congestion can affect a user's service.
Datamonitor also cites the problem of consumers needing to dial prefixes when making calls. Even so, "the threat of voice over the Internet has resulted in huge pressure to bring down retail rates [in the traditional telecoms market]," according to Datamonitor's Mohammed Hussein-Ismail.
Datamonitor does expect to see fax services transferred to IP in the near future. The fact that IP fax remains a niche market is down to marketing problems rather than technical hurdles, Datamonitor said. Once major service providers are able to stimulate demand, IP fax is set to become established in the mainstream.