Over-the-top VoIP to cost telecommunications companies $479 billion by 2020

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Telecommunications companies (telcos) will be losing $479 billion to over-the-top (OTT) Voice over IP (VoIP) according to business and technology analyst firm Ovum.

The research done by Ovum indicates that while OTT VoIP won’t be taking over from more traditional telecoms, it will absorb about 6.9% of total voice revenues in the next eight years or so. The research suggests that a “…focus on creating cloud-oriented telephony apps, and efforts to maintain the relevance of telephone numbers will ensure that operators have a place in the future communications landscape.”

Users who have taken, or will take, advantage of VoIP services have seen their attitudes towards conventional telephony shift as a result, something that will impact telecoms who have opted to stay away from the cloud. Users are expecting a broader experience which telecoms cannot give them with their standard offerings.

Jeremy Green, principal telecoms strategy analyst at Ovum, said “The major threat posed by OTT VoIP is that it weakens customers’ attachment to their telephone number and transfers their attachment to a new address. This may turn out to be a more significant factor than the direct impact on telephony revenues. Operators should use telephone numbers as the identifier and address for cloud-based services, allow customers to choose numbers that are relevant to them, and develop more application-to-person SMS applications.”

 

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