Skype and other services will cost the global telco sector almost $400B over the next four years

The world’s telcos are set to lose almost $400 billion in revenues over the next six years due to the disruptive impact of voice over IP  services like Skype and Link. The figure comes from a new Ovum report which also suggest that internet phone calls will grow by over 20 per cent a year for the next four years.

(Image: Report author Emeka Obiodu)

Of course it’s not all bad news. As we have reported before the rise of the mobile economy and fast broadband means that’s there upside on the data business which will grow almost exponentially.

The big losses however will mostly come from international call revenues, including roaming, according to the authors.

VOIP minutes will reach a stunning 1.7 trillion minutes by 2018. and this growth is being driven by improvements in the availability and speed of broadband networks; the growing sophistication, affordability, and capability of smartphones and computers; and the rise of social media.

” If the current trajectory is maintained, Ovum expects telcos to lose US$63bn in voice revenues in 2018 as customers use free OTT VoIP solutions,” according to the report.

“Unfortunately, telcos must learn to live with this reality; the use of VoIP will grow increasingly over the next five years to become the underlying technology for delivering voice over telecoms infrastructure,” says Emeka Obiodu, principal analyst at Ovum.

 “Blocking these services, entering into alliances, or trying to out-compete OTT players using services such as Joyn, are not going to stem the OTT VoIP tide. Instead, we encourage telcos to neutralize the price arbitrage that makes OTT VoIP services appealing.”

As things stand today the situation varies between markets and geographies.

In North America, for instance where Telco’s  already offer unlimited/abundance voice bundles, incumbents  have been able to secure their revenues while leaving customers to use whatever VoIP service they want say the authors.

They contrast this with Western Europe and developed Asia who they say will all lose revenues for VoIP calls that originate from their fixed broadband infrastructure.

“While these early initiatives have been for postpaid customers, Optimus Portugal’s WTF tariff has extended the unlimited voice bundle plan to prepaid customers. This is a trend we expect to spread through the telecoms market as telcos adjust their pricing strategies to charge for metered data rather than metered voice,” said Obiodu.

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