Report: VoIP Is Ready For Big-Time Breakout

Internet telephoning has been something of a sleeping giant that is finally being aroused, as major carriers begin spending billions on the emerging technology, according to a study on VoIP and next-generation voice released this week.

Infonetics Research estimates that spending on next-gen voice gear worldwide was $1.2 billion in 2003. It will jump to $4.8 billion by 2007, said Infonetics' directing analyst Kevin Mitchell.

"We talked with 32 carriers--major and minor," said Mitchell in an interview Wednesday. "And we found out what's driving them. . . .It's no longer just specialists or VoIP pioneers, but all types of carriers in all regions of the world that are adopting VoIP technology and using it to build a new set of service offerings."

Mitchell said that new applications and services--"Features they can't offer now"--are clear enticements to enter VoIP, and were cited as such by 72 percent of the respondents in the Infonetics survey. A total of 94 percent said they planned to offer hosted IP voice by 2005--up from 56 percent in 2004.

Mitchell noted that top-tier service providers look at their rollouts of VoIP as a strategic tool to combat revenue erosion in increasingly competitive telecommunications markets.He observed also that multiprotocol label switching (MPLS)--in routers primarily-is many a service providers' most popular means of offering quality service in a cost-effective manner.