Studio Press

LOCAL Voice-over-Internet Protocol (VoIP) industry players face new challenges in an increasingly competitive communications arena and they will need to adapt their businesses quickly if they are to succeed, according to research firm IDC Malaysia.

These challenges include moving VoIP beyond voice, making it easier to access, and forging collaboration amongst industry players, said senior analyst Lincoln Lee.

“VoIP started out early in the millennium as a means for people wanting to make cheap calls,” he said at IDC’s Directions 2006 seminar last week.

“Today VoIP is no longer about cost savings. Technological disrupters such as fixed mobile convergence, IP telephony, WiFi and trends such as unified messaging, broadband and mobile growth have changed the landscape,” he said.

Lee said VoIP began in Malaysia predominantly as a “prepaid card” service catering to foreign workers and to those who wanted to make cheap calls in place of their PSTN (public switched telephone network) service.

“As competition grew and as more foreign workers were forced to repatriate, the market faced a shakedown,” he said, adding that many early players then fell out of the market.

But as technology advanced, the quality of calls became better such that even corporate clients began using VoIP as an alternative to PSTN connections, Lee said.

“This is approximately where we are now, an era loosely known as ‘VoIP 2.0,’” he said.

Lee said that in the VoIP 2.0 world, users are not only able to make free or cheap calls but they are beginning to experience unencumbered access to information.

“The true value for users is created by the ability to get access information – be it voice, video, text or e-mail. – anywhere, anytime. It is not about the handsets or the devices, neither is it about the display or the interface.

“When accessing the information, they want to do it as simply and as easily as possible, and without having to struggle with it,” he said.

Lee said the core principles of VoIP 2.0 is no longer the replication of PSTN service – merely to carry voice – but to view voice as an application that is integrated with web applications.

“Take a look at Skype, GoogleTalk, Project Gizmo, Vivox; all of them have call communication functions embedded with connectivity to extend their voice services,” he said.

He said local service providers must adapt to this trend and face these new challenges failing which, global players could penetrate the market and lessen the local players’ share of the pie.

“Globalisation through the Internet will blur the lines in the near future. These players could knock down the front door of the local players challenging them in their very own backyard,” he said.

To achieve better co-operation within the industry, Lee suggested that local players band together and look at how they could leverage on their collective strengths while minimising their weaknesses.

“The silo mentality has not worked. Malaysian VoIP players and the Government need to resolve issues such as interconnectivity between VoIP networks to help local players prepare for the competition.

“If not, we could lose out to global players (in the future),” he added. -theStar