Bloglines - A Dead Phone Business - The Economist

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JupiterResearch Analyst Weblogs - Wireless

A Dead Phone Business - The Economist By ifogg@jupitermedia.com Hype. For now. The leader article inside the magazine is a little more circumspect. It debates the 'how' and the 'when' but places any 'death' as a (certain) future event rather than something that has already happened. Either way, both cover and leader are misleading. What VoIP will do is change the features of telephony for which operators will be able to charge. Distance will become unimportant. Prices will fall but so will costs. Profits will still be possible. The key question is what will consumers pay for? To date, mobility has been one of those things. The Economist also argues that pure play mobile operator voice revenues are more at risk than those of fixed line operators, like BT or Telenor, that plan to embrace fixed VoIP wholeheartedly. That assertion is far from certain. For as long as mobile operators are able to offer shiny new mobile phone handsets with innovative features that consumers want, but will not pay for without operators' subsidies, the mobile operators have relatively closed systems that they can manage and protect against VoIP threats. Additionally, consumers have already demonstrated a willingness to pay substantially more for telephony via a mobile phone than for fixed telephony. The biggest medium term risk to mobile operators is increased competition from their peers: both other mobile operators and entrant mobile players that use an MVNO model. Clients should read this report on European MVNOs and the new US Broadband Telephony Forecast for Jupiter's take on these areas in detail. Clients should also watch for forthcoming European research on VoIP that will be published this autumn. Magazine editors, really, this isn't a trend, but please do call us if you'd like to hear Jupiter's analysis before you go to press, rather than after.