Many of us are familiar with telecom's nuclear winter of a few years ago. If there's anything that could revive the telecom industry's fortunes, it would probably be voice-over-Internet Protocol (VoIP) technology, in the same way the surge of Wi-Fi revitalized an otherwise maturing notebook PC segment.

A new study by Info-Tech Research found that 23 percent of small- to mid-sized enterprises are already using VoIP technology, and the firm expects the number to grow to 50 percent by 2008. The report says that VoIP is growing even more quickly than expected, and the speed of the technology changeover has put a strain on IT managers.

Internet Protocol was in fact among the key enablers of the legendary Internet take-off. So the telecom world is willing to abandon its century-old traditional telephone technology and jump onto the convergence bandwagon enabled by IP packets.

Instead of occupying a whole end-to-end telephone connection, voice signals will move in packets, along with data and video traffic, thus enabling efficient use of network capacity.

But that's only one of IP's promises. The real prize lies in the ability of IP to deliver converged digital content.

Given IP's roots in the computing world, the VoIP factor will likely have a profound impact on the PC segment as well. Then there is the notion of IPTV, which is further pushing the convergence agenda. According to In-Stat/MDR, the IP set-top market reached more than 1 million units for the first time in 2004. The research firm projects that the market will grow to more than 8 million units in 2008.

Many industry observers believe that beyond wireline telephony, VoIP could play a crucial role in mobile and broadcast applications. It could, for instance, become the enabler of emerging technologies like WiMAX. Broadcast firms like Sony are also shifting to IP-centric gear for studio equipment that supports applications like streaming-video delivery.

Asia has fully embraced the VoIP call. According to a Market Intelligence Report (MIR) titled "VoIP Products," produced by our sister publication Telecom Products, there are about 50 OEMs of VoIP devices each in mainland China and Taiwan that are expected to produce around 4 million devices this year. Korea is also picking up the pace as products like IP gateways and soft switches enter the commercial mainstream.

That's mostly to meet the demand from the other side of the Pacific, where telecom operators like Verizon and cable companies like Comcast are planning to install millions of VoIP lines. That will translate into millions of IP phones or VoIP-enabled PCs.

Despite all the promise that IP brings to the telecom and multimedia industries, it would be worthwhile to play with caution so we don't fall into the same hype that eventually led to the bursting of the telecom bubble just a few years ago.

IP is no magic machine. To make it a success in communications and broadcast domains, the industry will need to create new service platforms that would help facilitate the convergence of digital media. And the development efforts will go far beyond IP lingua franca.

Email the Editor

Back to top