Why Voice is still the ‘Killer App’

By Kevin Isacks, Vice President of Software as a Service Solutions, Ribbon Communications

The Voice-over-IP (VoIP) industry has been on an upward curve for the last 20 years, and as the quality, predictability and economics of packetised voice sessions continues to improve there’s no immediate end in sight to the growth.

However, it’s the nature of growth in the industry that will undoubtedly change moving forward. The initial catalyst of replacing switched voice with VoIP to reduce costs has been overtaken by increased innovation in applications and embedding voice, video and messaging into enterprise productivity applications, mobile apps, web experiences and contact center platforms.

There is recognition today in the value created by VoIP-based, and particularly cloud-based, real time communications software and Communications Platform as a Service (CPaaS) offerings, which make the blending of sessions easier to perform.

In addition, while the transition to VoIP, as is generally the case with any disruptive technology offering, is still predominantly driven by falling costs and rising demands, the demands themselves are surfacing in different ways.

In today’s ‘I want it now’ culture, we increasingly don’t want to have to dial a phone number when we want the answer to a question. We’d prefer to tap once and get an answer from a human expert there and then, within the relevant context. However, phone numbers are still valuable as a unique addressing scheme, which can be clearly seen in the use of OTT apps such as WhatsApp.

Then there’s the growing shift to a more geographically diverse and mobile workforce. This is driving huge demand for more VoIP-based communication and collaboration platforms, which offer the capability to initiate affordable calls over wireless and cellular networks.

Even offices themselves are becoming increasingly unlikely to house fixed landline phones. More and more businesses operate remotely, with staff using laptops and smartphones, and even in the office there is typically a need not only for voice but for converged email, IM, collaboration and more.

The impact of demand from emerging countries with no fixed or very little infrastructure is also contributing to the growth in VoIP. Countries such as China and India are investing in broadband and internet access, overlaying private networks leveraging VoIP. This is making businesses from start-ups to huge enterprises more competitive on both a regional and global level.

Meanwhile, Communications Service Providers (CSPs) have historically generated large revenue growth by helping businesses at the SME end of the scale make significant cost savings by moving off time-division multiplexing (TDM) to VoIP-based services. However, these costs savings have also translated into productivity gains as employees moved to mobile and even mobile-only voice sessions.

When it comes to continued growth in the VoIP industry, forecasts remain strong. Technavio’s Global VoIP Services Market 2017-2021 report predicts the VoIP services market size to grow at a CAGR of approximately 10% by 2021. The rise in adoption of BYOD policies globally is noted as one of the primary drivers for this expected growth.

It may have taken around 20 years since IP-telephony emerged to reach the majority of subscriptions, but the path for growth ahead is still long and wide, even with industry consolidation and as VoIP becomes more commoditised.

With more and more bandwidth available at less expensive prices, and the advent of 4G and 5G networks, quality as a premium service is becoming easier to deliver. From deep pocket investment to deep packet inspection, billions of dollars moved over to VoIP-powered services and applications, and after a great two-decade run, the industry’s growth trajectory is still upwards.

Indeed, Frost & Sullivan expects the hosted IP telephony and UCaaS market in North America alone to maintain robust double-digit growth rates to 2023, while in Europe we’re seeing examples of CSPs turning to solutions that enable them to support increases in VoIP traffic with other national and international operators. This includes the likes of POST Luxembourg, which has adopted a new SBC solution to seamlessly deploy and scale its IP peering connectivity. With growth in the VoIP market expected to continue to grow for the foreseeable future, it’s clear why Voice is still the ‘Killer App’.

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David Dungay

Editor - Comms Business Magazine