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Exec Warns of VOIP 'Black Hole'

Telco incumbents should beware black hole of VOIP, warns equipment manufacturer chief

December 15, 2004

1 Min Read

LONDON -- The UK CEO of one of the world’s leading telecoms equipment manufacturers, and Deutsche Telekom’s main equipment supplier – DeTeWe – has warned the industry that up to 40% of the free cashflow currently generated by the telecoms operators could disappear by 2007, as a direct result of the move to Voice over Internet Protocol (VoIP).

The telecoms incumbents worldwide currently generate something like $450bn of combined free cashflow annually. They can expect to lose 30-40% of this revenue stream by 2007 into the ‘black hole’ of voice over internet, warns Nadahl Shocair, CEO of DeTeWe UK and Directing Strategist, DeTeWe AG & Co. Speaking at a DeTeWe-hosted industry briefing at London’s Reform Club today, Shocair said:

“The black hole of Voice over Internet is going to claim at least 30-40% of the telecoms operators revenues over the next 3-4 years. The telecoms market is changing at a rate of knots. Disruptive technologies – namely Voice over Internet Protocol - from providers like Vonage and Skype promise to batter the incumbents’ revenues at an alarming speed as IP telephony takes off. As the voice and service quality of VoIP improves, the enterprise market – seen by many as the saviour for the incumbents in terms of keeping revenues alive – will also switch to IP – probably in the form of managed IP services. These are interesting times – unless of course you’re an operator relying on traditional circuit-switched voice revenues.”


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