Voice over Internet Protocol popularly referred to as VoIP is a turnkey methodology that uses various voice and data transfer technologies to provide communication services over a packet-switched network. Some of the voice and data technologies that the service uses include; Voice over broadband, IP telephony, and internet telephony.
The VoIP service requires the conversion of voice signals into digital signals. The digital signals are then transferred over the IP—based net. VoIP services are executed via any of a myriad of protocols, these include the H.323, Inter Asterisk eXchange (IAX), Session Initiation Protocol (SIP), Media Gateway Control Protocol (MGCP) and Real Time Protocol (RTP).
The global VoIP service market is largely driven by key players and industry participants whose chief objective is to focus on pushing VoIP based solutions across both the individual and larger corporate consumer sectors. The focus has worked to ensure prolonged developments on various facets, major among them being the network infrastructure and cloud-based models.
Consumers both far and wide have been adamant in asking for innovative solutions that in turn reduce costs incurred in availing communication services, this has trickled down to both the open-sourced and proprietary platforms witnessing newer technologies.
Future Market Insights has run studies and research on the mobile VoIP services market and has, in turn, provided a detailed, comprehensive and objective breakdown that seeks to offer a deeper insight behind the forces that are so keen to drive the service into the now notable popularity. The report further provides information regarding the major sub categories of global VoIP services market for the next half decade. Included in the information is also market trends and structure, industry drivers and resistant’s’.
The growth of VoIP services globally can be attributed to enhance technological advances which in turn lead to roll out of advanced networks and an increased usage of the service over countless networks. Another factor attributed to the growth of VoIP services is business customers who are adopting cloud-based VoIP services, which is largely due to the service’s packaged service offers and cost effectiveness. Finally, the other growth catalyst is the diversification of key telecommunication players.
In 2012 alone, the corporate consumer segment registered 98.9 billion subscribers, which accounted for US$ 43.27 billion of the global VoIP services market in terms of revenue. The Future Market Insights predicts the number of subscribers in the year 2020 to increase a little over 204.8 billion, which will account for US$ 86.2 billion in terms of revenue.
Computer to computer segmentation of the VoIP service registered revenue of US$ 20.7 billion, from 57.4 million subscribers in 2012. A projected analysis predicts this particular segment to account for US$ 24.7 billion with 72.2 million subscribers in 2019. Phone to phone segmentation accounted for US$ 15.9 billion from 35.9 million subscribers and is projected to have US$ 44.8 billion from 116.5 million subscribers in 2019.
The computer to phone segment accounted for US$ 27.4 billion with 58.3 million subscribers and is projected to have US$ 56.6 billion with 128.3 million subscribers in 2019. Finally, the individual consumer segmentation in 2012 had 52.7 million subscribers, contributing to US$ 20.7 billion in revenue, it is the fastest growing segment as it’s projected to increase its customer base and consequently the revenue between 2014 and 2019.
The tremendous growth can be attributed to service providers who’ve transitioned from circuit-switched networks to packet-switched networks. This has then seen the market metamorphosis from the rudimental telephony using CDMA or GSM technology, to a more advanced VoIP service which uses cellular networks such as 3G and 4G. However, the market has had restraints like the low public acceptance of the VoIP service especially in the residential consumer segment.
The problem has been seen to disappear as there is a growing need to make long-distance or international calls. This can be attributed to a moving, working force and a migrating population. Though regulations and policies set in place by regional governments which seek to safeguard the local telecom industry are hindering VoIP’s service growth, the problem is expected to phase from the high to medium and eventually low by the end of the forecast period.
The surge of players in the market forces for price competitiveness, which then forces companies to offer bundled services to make their offer attractive and different. Some of the key players include; Vonage Holdings Corp., RingCentral Inc., 8×8 Inc., Nextiva Inc., and InPhonex LLC. These companies focus on providing both local and international calling plans.
They also have additional services like; emergency number calling (911), speed dialing, call blocking, call transfer, conference calling and fax support. In 2013, AT&T Inc. led the market as it accounted for 7.5 % of the global VoIP services market revenue.
VoIP refers to the technology that converts audio and video calls to digital form so that they can be transmitted over the internet to a receiver. Typically, when one makes a call using a mobile phone it is transmitted to a receiver through the traditional phone providers’ network.
There are several ways in which VoIP operates. First, one can use an Analog Telephone Adapter (ATA).The ATA helps to connect a phone to the internet so as to convert the raw analog information to digital data. Phones that can connect to the internet can also make VoIP calls to other phones using the same provider.
IP phones can also connect to the internet using a special inbuilt RJ-45 connector for Ethernet thereby enabling VoIP. Lastly, one can get VoIP through a computer to computer communication as long as the computer in connected to high-speed internet.
The Public Switched Telephone Network (PTSN) is made of high infrastructure which is poorly utilized making the call rates higher as compared to the VoIP which has high utilized low infrastructure. Therefore traditional telephony is much more expensive especially when the calls are over a long distance due to the international levies.
The PTSN are heavily regulated by the providers and the particular countries, unlike the VoIP. For example, circuit-switched calls are limited to a particular service and if they are to cross to another VoIP service provider, there are additional levies. The development of PC to PC, PC to phone and eventually phone to phone VoIP has lead to an increase and ease of making VoIP.
The major challenge prevalent in some countries is the availability and reliability of the internet connection. The more the people who can access reliable internet connectivity, the higher the chances of increasing the users of VoIP.
Second, some countries have imposed regulations and licenses for VoIP which is retarding the growth of this technology. For example, in Vietnam, PC to Phone or phone to phone internet calls are prohibited. Some countries hesitate on lifting the restriction since it is feared that because the VoIP calls cannot be pinned geographically, they might offer terrorist an untraceable method of communication.
Most VoIP calls have poor voice quality especially the PC to PC calls. This is due to the distance involved and the quality of the particular coding algorithms used. However, with the increase in the phone to phone internet calling the quality of the voice has improved and also due to increased research in this field.
According to The Economist, September 2005, it is not a question of whether VoIP will dominate the communication world but a question of when. With the current incorporation of internet calls by popular social media platforms like Facebook and WhatsApp, we are mostly facing a decline of the current traditional telephony.