The diffusion of VoIP (voice over internet protocol) fosters ...
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The diffusion of VoIP (voice over internet protocol) fosters ... 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
  • Outline
    • Technical characteristics of VoIP-modularity
    • Analysis of VoIP economical characteristics, such as indivisible, fungible, cumulative and complementary in respect to internet protocol.
    • Layer model
    • 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)
  • Objective
    • 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 reduces the cost of communication
    • VoIP could be considered as a module
    • modularity- (Baldwin Clark, 1997; Steinmuller, 2005)
  • Economics characteristics of VoIP
    • 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
    • Few innovations
    • Fragmented Knowledge based
    • Medium-powered incentives
    • Slow, sequential, innovation
    Fransman (2003)
  • 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)
  • Conclusions
    • The Knowledge dynamics has been a vehicle of welfare for consumers
    • Policy implication, VoIP diffusion fosters the widespread of broadband internet connection