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The Death of Traditional Telephony? Not So Fast, But VoIP Is Costing Operators

October 25, 2012 - News

Despite fears of the traditional telephone completely dying out with the onslaught of VoIP services, new research indicates traditional telcos can rest easy, knowing the telephone will live on.

Ovum says VoIP will not replace the traditional telephone, but it will impact telephone companies' revenues over the next eight years, costing the global telecom industry $479 billion by 2020, representing nearly 7 percent of total voice revenues.

As revenues fall, Ovum says voice traffic is shifting, not collapsing. Creating cloud-oriented telephone apps and putting forth effort to maintain the relevance of telephone numbers will keep operators up with the times.

“Where operators have seen voice telephony as a service without a future, they have chosen to compete on price in an effort to eke out any remaining revenues from the market," said Jeremy Green, principal telecoms strategy analyst at Ovum. “However, taking such a pessimistic view obscures some important commercial realities and opportunities in the voice telephony market."

Telephone revenues will not collapse completely, Ovum said, but the trend will shift toward more complex communication platforms where voice plays a different role. Users now expect traditional telephone operators to provide content, relationships, and history within a service, and Ovum recommends that operators develop applications that link cloud services with telephone usage.

In addition, Ovum views the existence of the telephone number as a key asset for companies because it is important to their relationships with customers.

Green advised operators to use telephone numbers as the "identifier and address" for cloud-based services. He also said companies should let customers choose numbers relevant to them, and they should develop more application-to-person SMS apps.

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