The fate of the service provider

With the coming of VoIP, new technology offering that has never before dreamt possible, has surfaced. For instances, we could now have the combination of both voice and data into one infrastructure.

With the coming of VoIP, new technology offering that has never before dreamt possible, has surfaced. For instances, we could now have the combination of both voice and data into one infrastructure.

This will integrate voice mail, e-mail and fax mail into one single applications suite. The cost of long distance enterprise- to- branch office call will be lower since the calls are routed within the enterprise own wide area network. VoIP is not a proprietary technology. Thus, different VoIP hardware can work together in synergy. Unlike the PABX system which is fiercely proprietary.

With the promised of a bright VoIP future, a new breed of telco service provider has mushroomed into today’s scene. The main core business activities of these new generations of telco service providers are to give the public packet switch voice services.

In an e-mail interview with Mr. Ng Kai Wa, CEO and co-founder of InnoMedia Pte Ltd, he has provided ZDNet Asia with a comprehensive view for the future of traditional telecommunication service provider. Here is an excerpt from the interview with regards to the future of tradition telco in Asia.

“The liberalisation of the telecommunications industry five years ago has brought impetus to the adoption of VoIP in the region. The initial motivation for new age telcos to offer voice services was in the form of calling cards to give the incumbent telco a run for their IDD revenues. This was primarily due to the more efficient way of using VoIP for voice and the availability of technology such as VoIP gateways. Almost anyone can be a mini-telco by offering calling card services with very low costs of investment. This brought about massive price erosion of international calls in the region in the past three years. Today, the incumbent telcos have more or less caught up in the race by deploying VoIP in the backend infrastructure. In fact, some of them have been forward-looking enough to adopt the IP platform earlier.

Essentially, except for the last mile, which is analog, most of the back-end infrastructure is IP. The only question is pricing. When telcos slashed prices, margins for the calling card business were squeezed and resulted in the folding up of many such companies. To the end user, there is essentially no difference whether it is VoIP or IDD. The consumer picks up a regular phone and dials a new prefix for more economical VoIP service whether its 019 or 001.

The real impact of VoIP is really in two areas, enabling new data service providers with the capability to offer voice, and the potential of value added services over the same IP last mile, which PSTN is not able to offer.

With VoIP, service providers who were traditionally not in the voice business such as cable service operators and MSOs are now able to offer voice through their last mile e.g. Hybrid fiber Coaxial (HFC) network. Consumers are now able to plug a phone into the cable access point (cable modem) and not to the RJ11 socket from the telco and still get a decent voice service. Furthermore, with an IP access point to the homes, other value-added services such as messaging, videoconferencing etc can also be delivered over the same last mile.”

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