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Yankee Group Reveals Web VoIP Services As New Market Threat to Telecom Incumbents

Posted on: Wednesday, 27 September 2006, 09:00 CDT

Yankee Group today announced that web-based VoIP applications are posing

a competitive challenge for traditional service providers in their drive

to maintain customers. While telcos typically focus their attention on

the competition from cable companies and wireless carriers, a new market

threat comes from Internet-based voice applications, which offer

consumers a compelling service that enables low-cost or free calling

across international boundaries.

According to the Yankee Group Report, Web Voice Services Challenge

the Incumbents in Telecommunications, published recently, the

build-out of voice services including Skype, Google Talk, Yahoo!

Messenger with Voice, Microsoft's Windows Live

Call and AOL's AIM Phoneline have heightened

consumer awareness of VoIP by enabling free calling between PC-to-PC

users. However, it is the new and unique contextual applications for

voice that will be a draw for the technologically advanced consumer over

the next five years and challenge telecom, mobile and cable companies to

provide comparable voice services. Yankee Group finds that contextual

applications for voice - where users discuss their interactions while

gaming, shopping or building content - is the most compelling service

that will drive consumers to greater usage of web-based VoIP services.

Currently, gaming has the greatest potential for unique web voices for

consumers in this arena.

"With a footprint larger than the telcos and

cablecos, as well as price points far below premium mobile services,

web-based VoIP applications are seen as a disruptive threat for

traditional telcos in the industry right now,"

said Jennifer Simpson, Yankee Group, Consumer Technologies & Services

analyst. "One way for telcos and cable voice

operators to preserve their legacy voice customers is to build service

partnerships with portals to gain some revenue in this emerging market."

Portals play an important role in the growth of online voice

applications because their current audience share far exceeds the

customer base of traditional service and cable providers. However, all

web-based voice providers are not created equal: Skype has been strong

in building out its services beyond the PC; AOL's

AIM Phoneline has made efforts at building out telco-like packages of

minutes and Google is depending on developers to enhance its service

provisions. It will be difficult for telcos alone to provide services

similar to the new voice communications because of the enhanced content

provision capabilities of web-based voice applications.

NOTE TO EDITORS

For interviews contact:

Jennifer Simpson, Yankee Group analyst, 617-880-0310, jsimpson@yankeegroup.com

Christina Oh, Yankee Group public relations, 617-880-0238, coh@yankeegroup.com

YANKEE GROUP (www.yankeegroup.com)

Yankee Group is the expert in navigating the global connectivity

revolution. For more than 35 years, Yankee Group's

strategic vision, research and analysis, quantified market intelligence

and credible advice have been guiding innovation and empowering our

clients to make critical business decisions. Yankee Group is

headquartered in Boston with presence throughout North America, Europe,

the Middle East, Africa, Latin America and Asia-Pacific.

Source: Business Wire

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