VoIP will prove inevitable

14 January 2008

While the VoIP market is still at an early stage, itis becoming more prevalent in the Asia-Pacific region. We are seeingmore operators launching VoIP, primarily as a means of challenging thepublic switched telecommunications network (PSTN) dominance of theincumbents.

Growth in broadband penetration is necessary forVoIP to develop, but it is not sufficient. New fixed operators aredriving VoIP uptake in most markets, as they implement triple-playstrategies (voice, data and content services) tocompete with incumbents. Most incumbents are taking a defensiveposition, cutting PSTN prices and strengthening their content offerings.

Overall, we are seeing incumbents and challengersstrategies starting to converge on a triple-play model. VoIP is givingsmaller fixed challengers the opportunity to build up true triple-playoffers without having to rely on resale of incumbent wholesaleservices, and to exploit IP technology to do so at lower cost. This isgiving more price flexibility to challengers and allowing them tocompete on a more even footing.

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