Voice-over-IP (VoIP) Revenues to Dominate the Broadband Service Sector, Generating $26bn by 2009

BASINGSTOKE, England--(BUSINESS WIRE)--March 17,2004--A new report from industry analysts, Juniper Research, finds that the VoIP market will become the key revenue generator for broadband service providers by 2009, contributing to an overall value-added services market of $47bn. This will be in addition to the $43bn spent on broadband access in the same period.

Ian Cox, Broadband Specialist at Juniper, said "Broadband penetration has now grown to a level where the industry is on the verge of a revolution, as it is now economically attractive to launch value-added services to a mass audience".

The challenge to service providers will be to provision these new services as cost effectively as possible as traditional revenue streams from existing fixed-line voice services continue to decline. Flat-rate IP based voice tariffs will gradually replace time and distance related tariffs. These declines may, to a certain extent, be off-set by a reduction in operating costs for converged networks.

Broadband Value-Added Services

Although much attention has been paid to the more complex and 'sexy' value-added services like video-on-demand and on-line games, it appears that the biggest opportunity will be in voice services as broadband IP-voice takes over from traditional circuit-switched voice; driven by lower operating costs and competition between incumbents and new licensed operators.

Key Messages

• Service providers need to take advantage of the opportunity provided by broadband value-added services to protect their profitability and move as quickly as possible to a converged network.
• Equipment vendors need to have in place fully integrated systems in order to provide truly 'one-stop' shop solutions to providers.
• Content providers need to prepare for this on-going revolution by re-purposing and protecting their content for digital distribution, or risk losing market presence.