The diffusion of VoIP (voice over internet protocol) fosters ...Presentation Transcript
The diffusion of VoIP (voice over internet protocol) fosters the process toward the info-communication industry CECERE Grazia Phd student in economics Dime workshop « Distributed networks and the knowledge and the knowledge -based economy » 2007 Université Paris Sud 11, Laboratoire ADIS, France Joint Supervision University of Torino, Italy Visiting Student University of Sussex, SPRU, United Kingdom
Technical characteristics of VoIP-modularity
Analysis of VoIP economical characteristics, such as indivisible, fungible, cumulative and complementary in respect to internet protocol.
Telecommunication industry toward the info-communication industry knowledge dynamics.
Two main models of VoIP application and the criteria for distinguished them.
Two main applications
IP network Voice service” providers are Internet Service Providers (ISP), technology applied to the broadband networks; they offer free calls and other bundling services, examples are Iliad/ Free, Talk-to-Talk, Vonage, FastWeb -1999 and 2001
“ VoIP software- service” allows communication PC-to-PC, thus the communication is made thanks to free software downloading, such as Skype, Yahoo voice messenger - 2002 and 2003
Incumbents have applied the technology only for enforcing the backbone- no new offers for consumers (less competitive)
The article shows how the VoIP technology is transforming the telecommunication industry into the info-communication industry. How these generate knowledge dynamics into the industry as it became IP based and how these changes generate welfare for the consumers.
Evolutionary approach and knowledge economy
1. Technical analysis
Distinction among packet switching technology and circuit switching ( traditional public switched network-PSTN )
VoIP is coming from a “general purpose technology” ( Bresnahan, Trajtenberg, 1995; Verspagen, 2007) the internet protocol. For this reason, I assume that it has the same characteristics of knowledge: indivisibility, cumulative, fungible and competitiveness.
(Scotchmer, 2005, Antonelli, 2005 )
Knowledge dynamics Competitiveness (the merger/combination of voice and value added services) Cumulative and indivisibility (applied to the TCP/IP network) IP network voice providers Fungible (more internet based applications are possible Cumulative and indivisibility (voice send on the internet network) VoIP software Convergence of Services/applications (voice+ value added services) Technological convergence (telecommunication/internet)
Layer method: static and dynamic analysis Fransman (2002b), Fransman Krafft, (2002) avec actualisation de l’auteur Alcatel/Lucent, Cisco, Nortel Equipments and software (transmission equipments, switches) I Incumbents and new entrants on the network building Network transmission (optical fibre, ADSL, cable, wireless -Wifi, Wimax) II Skype, PayPal (ISP-internet service providers et ASP-service acces providers) End-to-end connectivity (email, VoIP) III Google, Yahoo Navigation (browsers engines, electronic payment security) IV Ebay, iTunes, Myspace, VirginMega Application layer and content diffusion/production V Firms Activity Layer
Inter and intra layer convergence II- physical and wireless internet connections III- email service IV- search engines V – video diffusion II – internet providers and network Iliad/ Free II – wireless service III- VoIP IV- games, number telephone searching V- kazaa inventors (music downloading) Skype IV – search engines III – VoIP and email service V - Information, translation IV –navigation middleware Yahoo Google Layers occupied today Former layer Firms
Some economics evidences
Explanation into the resource based view (Penrose, 1959)
Creation of economy of scale and scope (Davies , 1996, Maeda al. 2006)
Vertical integration of production
Info-communication industry vs. old telecommunication industry
Open innovation system
Low barriers to entry many innovations
Based on general purpose technology
Innovation incentive – new technologies and applications
Rapid, concurrent, innovation
Closed innovation system
High barriers to entry
Fragmented Knowledge based
Slow, sequential, innovation
Criteria for categorizing IP network voice service and Voice software-service Consumers Download the software and use handset for communication PC-to-PC :free PC-to-phone: extremely cheap Video conferencing, sending file Navigation & middleware layer and the application layers Exploit the bandwidth of internet network Voice software-service No different perceptions Subscription fees (unlimited calls) Bundle triple play service (video) Connectivity layer capabilities Internet service providers IP network voice service Consumers VoIP perceptions Cost of communication Multimedia options Providers’ Capabilities Network layer (layer 2)
The Knowledge dynamics has been a vehicle of welfare for consumers
Policy implication, VoIP diffusion fosters the widespread of broadband internet connection