In the telecommunications industry outlook analysis we published a year ago, VoIP (Voice over IP) consolidation was one of our conclusions. Two facts pointed towards this conclusion: First, the observed improvements in compression techniques, which allow for better voice quality; second, the commercial reality as seen in the products and services that are based on this technology, offered not only by alternative telecommunications operators or software providers, but also by some European incumbents.
In the second half of 2014, VoIP was the focus of media attention, occupying the front page of international economic newspapers. On September 17, 2005, The Economist ran a cover feature with the title "How the Internet killed the phone business." In this feature, this prestigious publication referred to VoIP as a disruptive technology of even greater consequences that the advent of the personal computer twenty years ago.
Disruptive or evolutionary, recent corporate transactions between the telecommunications and electronic businesses industries have now brought to the foreground a service which, far from being new, has been the focus of interest from industry players in recent years.
So, beyond the media effects that all M&A operations produce, the threats and opportunities resulting from this service have been the focus of attention from operators, hardware manufacturers, software factories and regulators for years.
The possibility of transmitting voice over networks based on IP (Internet Protocol) opens up a key stage in the convergence between circuit switching-based networks, which supported most of the PSTN (Public Switched Telephone Network), and the Internet. This process of convergence between networks and services is generating business opportunities for both established and new operators, as well as the need for a regulatory response to the issues that this is giving rise to.
The purpose of this document is to analyze the elements that make up this new VoIP reality (business, technical and regulatory), and to share some insights into the effects that VoIP is having today and will have in the medium term in a converging market with a high risk of voice and broadband commoditization.
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