VoIP shaking up telecoms

$18bn market motivating regulatory changes...

The booming voice over IP market is shaking up both the business and retail telecom arenas.

The market for VoIP business services is set to reach $18bn by 2010, according to a new report from Juniper Research. As a result of businesses moving to IP telephony, telecoms service providers will lose $36bn per year in sales.

The reasons for the boom include businesses seeing productivity and efficiency increases from converging voice and data onto one network and the rapid growth of the Chinese telecoms market, said Juniper.

Separate research from Integrated Research backs this up. Of 1,232 executives surveyed worldwide, 78 per cent of large companies say they are deploying IP telephony - largely to enhance communications with IP applications and services such as video conferencing.

Smaller businesses are getting into the action too. According to a Cisco-sponsored study by Vanson Bourne, nearly a third of SMEs have integrated their voice onto their IP networks.

VoIP is also causing a stir in the retail market. Today Ofcom announced it is proposing to deregulate retail phone cost controls, which means all telcos including BT could set their own prices for line rental and call costs starting 1 August 2006.

The regulator said this is due in part to the rise of new technologies such as VoIP, which offers low-cost calls and is used by more than 500,000 people in the UK.

Rising competition from cable networks local loop unbundling also motivated Ofcom's bid to deregulate costs.