IP based services will grow slowly

Services based on IP (Internet Protocol) are the key to telecommunication carriers gradually creating new offerings and reducing the cost of existing ones, but these services will remain a small part of North American carriers’ total business over the next five years, research company Insight Research Corp. said in a report released last month.

IP-based services will account for about US$28 billion in revenue cumulatively over the next five years in North America, according to Robert Rosenberg, president of Insight, in Parsippany, N.J. By comparison, overall revenue for carrier services in the United States alone now totals about $200 billion annually, Rosenberg said.

Most carrier services today are offered over traditional circuit-switched networks. Carriers can develop new services on IP networks more quickly and at less expense than on circuit-switched systems. Those services also can be more easily customized for specific customers’ needs. In addition, carriers generally can boost a customer’s bandwidth on an IP network at lower cost, Rosenberg said.

However, carriers’ migration to IP, and corporations’ adoption of the new services, will be gradual rather than sudden, he said.

“This is important because this is where the future is … not because they represent a pile of gold in the next six months,” he said.

The new services won’t be a solution to the current slowdown in the telecommunication industry, either.

“Despite all the hype about IP, we don’t think it’s gonna pull the telecom carriers’ irons out of the fire,” Rosenberg said.

The report points to six key IP services that will start pulling in revenue for service providers over the next five years:

– Audio conferencing. The cost of a multiparty teleconference bridge may be brought down to less than $.01 per minute from typical costs of several cents per minute on circuit-switched networks, Rosenberg said.

– Video conferencing. Using an IP network may drastically reduce the cost of this service. If inexpensive, high-speed Internet access becomes widely available, IP-based software could make videoconferencing attractive enough for even small businesses, he said.

– Web conferencing. These services will allow participants to view presentations and collaborate on shared data.

– Follow-me services. Customers can arrange to have messages and calls forwarded to a certain phone line or device as they travel around, with preferences also set up to control what kinds of calls and messages get through at a given time and place.

– Unified messaging. These services let users receive voice, e-mail and fax messages all in one place, such as in text on a PC or via audio on a phone.

– Instant messaging. This technology is likely to evolve from the current Internet-based services, usually free, to more secure services for business use that would generate revenue for service providers.

Most of these IP-based services are available now, though a potential customer might have to go to several service providers to get them all, Rosenberg said. Gradually, customers will find more IP services available from a single vendor. In addition, some corporations will jump ahead and set up the systems by themselves, he added.

Carriers are gradually migrating to an IP infrastructure for both voice and data services, but IP services today are mostly being offered on overlay networks. Those overlay networks, are linked to the existing circuit-switched network via gateways.

Insight, in Parsippany, can be reached at http://www.insight-corp.com.

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