Telecommunications Industry Barbara Yener Janet Jonson

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  • Janet How VoIP works is it converts the analog voice signal to digital signal packets that are sent over the IP networks by using a series of software- and hardware-based codecs (COderDECoder). Codecs not only perform the analog to digital translation but they also compress the digital signals for rapid movement through the network. Once received, the packets are converted from to digital to analog voice signals
  • Janet Potential lower installation costs of wiring because VoIP uses the same wiring installed for the computer network systems (category 5 wire). Additions, changes and moves are easier to do and cost less because the IP phone server automatically recognizes the media access control address of the IP phone and sets its configuration wherever the phone is located. Less staff and/or special staff needed to manage the system. The IP phone server can be managed by the network administrator. No large switches required because the VoIP uses the internet routers. Scalability and flexibility. Voice communications can be combined with a web site to offer a click-to-talk option. Substantial cost savings on long distance calls, especially international calls.
  • Barb
  • Both 1. Ad Revenue Model Used by competitors who offer free IP telephony to customers. Based on web advertising model which is an extension of the traditional media broadcasting model. The IP telephony provider's web site gives information about their services but allows other advertising messages in the form of banner ads to appear on the web site. Revenue is generated from the ads of the broadcaster (basically advertising revenue). This model works best when the volume of viewer traffic is highly specialized and/or large. Go2Call uses this type of model (4). 2. Charge/Fee Model An extension of the traditional telephone pricing model. A phone call made using VoIP will be assessed a per minute rate. The fee is less than the traditional telephone call costs. If a VoIP provider is using a charge/fee model, they will provide better quality services (usually through a private IP network) and more convenience compared to free/lower priced competitors. 3. Hybrid Model This model is a combination of the above two models. Due to the uncertain future of VoIP, companies are using this model to generate revenue from different sources. Some start out free until a fee structure and infrastructure solutions can be determined that generate desired profit margins for the company. Net2Phone uses this type of model (1, 4).
  • Janet AT&T has invested $135M into Net2Phone
  • Barb
  • Janet Deregulation - easier for new companies to enter market New companies are fining ways to provide faster, cheaper communications More mergers are occurring to create economies of scope and scale.
  • Barb
  • Both
  • Telecommunications Industry Barbara Yener Janet Jonson

    1. 1. Telecommunications Industry Barbara Yener Janet Jonson
    2. 2. Telecommunications Latest Disruptive Technology <ul><li>Voice over Internet Protocol (VoIP) </li></ul><ul><li>How it works: </li></ul><ul><ul><li>Converts analog voice signals to digital signal packets that are sent over the IP network using a series of software- and hardware- based codecs </li></ul></ul><ul><ul><li>Codecs performs the translations from A to D and D to A as well as compresses the digital signal </li></ul></ul>
    3. 3. Advantages of VoIP <ul><li>Lower wiring and installation costs </li></ul><ul><li>Additions, changes and moves of telephones are easier </li></ul><ul><li>Less specialized staff </li></ul><ul><li>No switches needed </li></ul><ul><li>Scalability and flexibility </li></ul><ul><li>Click-to-Talk option </li></ul><ul><li>Cost savings on long distance and international calls </li></ul>
    4. 4. Cost Structures <ul><li>Traditional Providers </li></ul><ul><ul><li>Switching plants and line wire </li></ul></ul><ul><ul><li>Per minute fees </li></ul></ul><ul><li>VoIP Providers </li></ul><ul><ul><li>Internet transmissions </li></ul></ul><ul><ul><li>Bypasses switching plants </li></ul></ul>
    5. 5. Business Models <ul><li>Traditional Providers </li></ul><ul><ul><li>Cost per minute </li></ul></ul><ul><ul><li>Flat rates </li></ul></ul><ul><ul><li>Bundle packaged deals </li></ul></ul><ul><li>VoIP Providers </li></ul><ul><ul><li>Ad Revenue Model </li></ul></ul><ul><ul><li>Charge/Fee Model </li></ul></ul><ul><ul><li>Hybrid Model </li></ul></ul>
    6. 6. Converging/Supplanted Business Models <ul><li>Large investments in fiber optics, plant and equipment </li></ul><ul><li>Emergence of new types of providers </li></ul><ul><li>Strategic alliances of companies within the chain </li></ul><ul><li>Software application development </li></ul>
    7. 7. Sustainability <ul><li>Technical problems </li></ul><ul><li>Establish consumer base </li></ul><ul><li>Define business model </li></ul>
    8. 8. Broader Economy Changes <ul><li>Deregulation </li></ul><ul><li>Faster, cheaper communications </li></ul><ul><li>Consolidation of communications </li></ul>
    9. 9. Accounting Implications <ul><li>Consolidated accounting systems </li></ul><ul><li>Cost allocations </li></ul><ul><li>Role reversal of costs and revenues </li></ul>
    10. 10. Conclusions <ul><li>Is VoIP a disruptive technology? </li></ul><ul><li>Is VoIP sustainable? </li></ul><ul><li>Provider landscape </li></ul><ul><li>Jury still out on VoIP </li></ul>

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