September 7, 2005

How VOIP would impact the Telecom industry

Read this article on how VOIP is impacting the telecom companies (or could impact). The article focuses on the number of users switching to VOIP and that the traditional companies could see a fall of upto 25 % revenue in the next few years.

I think VOIP could be the disruptive technology often referred to by Clayton M. Christensen in his book 'the innovator's dilemma' . This technology although just below the required performance levels of the regular telecom market is fast improving and moving into the rapid adoption phase. Now with microsoft, skype and google behind it , it should not be long before more rapid adoption happens.

all of the above should be great for the consumer, but what will happen to the telecom industry ...i would guess that their entire business model could get disrupted in the next few years ...what does this mean for companies like VSNL, bharti or reliance infocomm ?

some of them could face pain but would evolve with the new technology like reliance or bharti ..but i would not be too optimisitic for VSNL, MTNL and some others

i would be wary of investing in the telecom sector for a long term basis


George said...

I agree with your findings regarding the telecom sector, specifically long distance landline telephone providers. I think that voice commmunication is a commodity product right now that will not produce above average profits for those companies providing that service.

Rohit said...

i agree with your statement. It is quite interesting to watch the actual disruption of a business model as strong as that of the telecom providers. The evolution of the VOIP technology seems to following the typically price-performance curve as predicted by Clayton M. Christensen. The end result of such a shift could very painful to the incumbents. I have been using VOIP and have found it to be fairly good.

Jeff james said...

Hello, nice stuff on your site. I need to spend more time on my site about VOIP and other voip canada stuff. Thanks for some ideas.

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Vidyanshu said...

Hi Rohit,

The book though seems to be -
The Innovator's Solution !


Rohit Chauhan said...

Hi vidyanshu

i have read that book too ..however at the time of this post either the book was not published or maybe i had not seen it

it is good book though