better hang on..

By Damian May
SYDNEY, March 19 AAP - The cost of a phone call could be on the
way down with voice over internet protocol (VoIP) likely to take
off in Australia as Telstra, Optus and other smaller operators slug
it out to see who wins in the roll out of broadband internet
services.
VoIP allows consumers to make normal day-to-day calls over
household internet connections, and with faster and better
broadband connections lingering fears over sound quality can be
dispelled.
Some analysts believe that the advent of VoIP will bring down
the cost of making a normal call by more than 80 per cent which
could take a chunk out of incumbent telcos' fixed-line revenues.
"Voice is a cost driven market and the advent of VoIP could
slash more than 80 per cent off basic costs," said telecoms
industry analyst Paul Budde this week.
He believes incumbent telcos, such as Telstra, had "severely
neglected their cash cow", with industry innovation instead aimed
at harnessing the mobile market and now increasingly at securing
broadband customers.
"Telstra is repositioning to secure access revenues rather than
voice revenues," said Chris Roberts, product manager at Request
Broadband.
In the US and Japan VoIP is already making an impact.
IBM announced at the end of 2003 that it will move 80 per cent
of its 300,000 employees to VoIP phone systems by 2008.
"In 2004, 25 per cent of all international calls in the US will
be VoIP calls and in Japan, there were 5.3 million people able to
make VoIP calls in 2003," said Mr Budde.
Telstra recently slashed the price of basic broadband internet
access for consumers to $29.95 a month.
Although this has caused consternation among its rivals, which
claim they are being squeezed by Telstra, whatever the result of
the battle analysts believe cheaper broadband access is here to
stay.
"Sustained low prices from Telstra and its competitors will most
likely make the uptake of broadband much faster than anticipated,"
said Macquarie Equities analyst Tim Smart.
Some big corporate customers are already embracing VoIP; Telstra
has signed up Westpac Banking Corp which is expected to have
connected more than 30,000 handsets at 1,000 locations by December
2004.
"The Westpac agreement shows IP telephony is recognised as
bringing financial and productivity benefits through a single,
converged communications network," Telstra Data Solutions and Sales
Managing Director Paul Geason said.
Telstra chief executive Dr Ziggy Switkowski said earlier this
month that IP telephony and IP communications was the direction in
which the whole industry was moving and that Telstra welcomed the
migration.
However, he did admit that there was sure to be some degree of
cannibalisation.
Mr Budde pointed out that voice remained the "killer app" and
person to person communication remained key.
New services with new applications were needed and he said the
consumer love affair with photography and mobile phones could
easily be repeated through video over VoIP.
Mr Budde also said premium services could be built on top of
VoIP. For example, people could pay more money for CD quality
sound, as opposed to the one size fits all method of the moment.
Telecom Corp of New Zealand's AAPT is currently gearing up for
the launch of a new VoIP offering to the medium-sized and corporate
market.
"VoIP is more than just a way to offer cheap voice calls to
businesses and consumers," AAPT's chief marketing officer Jennifer
Tejada.
"It's about looking at the basic features customers already
receive - like voicemail, teleconferencing and call diversion - and
making these more flexible, scalable and simple. It's about giving
customers control over their services and usage."
"VoIP is not new technology. It's been tried and tested in
larger markets for many years. Australian businesses and consumers
are becoming increasingly interested in VoIP," said Ms Tejada.
"Offering voice with a focus on applications and customer
self-service is an area the traditional incumbents dont focus on,"
she said.
AAP dm/sjh