Will VOIP survive beyond 2012?

My answer is "yes" but not in the shape we are familiar with.

Mobile VOIP, the new kid on the block, has chewed into a lot of market space where "traditional" VOIP used to enjoy its market share. Now "fixed" VOIP services seem to be feeling the same pain that fixed network providers felt when Smart Devices showed up out of nowhere. Quickly reducing costs/minute on calls equating to very little margins that soon may shrink to zero and large looming threat of web-based offerings (the likes of Facebook, Google, etc) that now are playing in a space that was once a service provider domain.

It all adds up to the fact that VOIP companies (if not already) need to start looking forward and adapting their business models accordingly.

Mobile VOIP is a shining example of this.

VOIP and providing rich media communications on Smart Devices (I dont call them mobile phones anymore, sorry!) is the now of the future. Unless your business is thinking about how to take its share of this market then your company is going to be faced with an ever-shrinking bottom line until eventually VOIP is offered as a FREE add-on, value-added service bundled into other services. That leaves your VOIP-based business where exactly? You guessed it, out in the cold.

VOIP as such will be amalgamated into the 100,000's of Apps that can be downloaded onto your Smart Device. Love it or hate it, thats the future for VOIP. Anyone who has not heard of Viber, iCall, Truphone, Line2 and my personal favourite Fring (go check it out!) should pull their heads out of the techno-phobe sand and get in sync with the 21st Century. If you haven't already checked some of these Apps out I strongly recommend you do so. This is where VOIP is today.

Think about it. We didnt have Smart Devices with 3G connectivity and full-time wi-fi access 5-10 years ago, imagine what it will be in 5-10 years from now?

So will VOIP survive in 2012 and beyond? Definitely yes Jim but not as we used to know it. What are your thoughts?

Thanks for the input Andrew. You've hit the nail right on the head. Here in Europe VOIP is considered to be 1 type of product unrelated to the corporate, residential and mobile versions you've mentioned. Therefore "VOIP" is under threat in some quarters as this is the only key business being offered by certain providers. Thanks for sharing.

One of the challenges that we have concerning the future of VoIP is akin to the parable of the blind men and the elephant. Each was asked to describe what an elephant looked like by touching it. One thought it looked like a tree trunk, another thought it looked like a plow, and a third thought it was like a large fan. VoIP is similar. If we look at it from Europe, Latin America, Asia, or North America, it is different. For example, SIP trunking (no pun intended to the aforementioned elephant!) has become quite popular in the US but less so in Europe and not much at all in Latin America. There are many factors that attribute to these variances and some of them are changing as we discuss this topic. Within the US, there is a robust market for hosted PBX services that is growing rapidly among small businesses. Smart devices do not yet have the functionality to replace hosted PBX services although as a delivery vehicle, they are growing much closer together.

My view is that VoIP is here for the foreseeable future. The end points are going to change but the power of the cloud is only at the very start of being recognized and developed. There is much more to come and 2012 is hardly the end (unless the Mayans were right!).

Many of the “cheap call minutes” applications for mobile are not strictly “VoIP” applications, but rather use a strategy of making a conventional “in-bundle” call to a local point-of-presence, and from there the call is routed over a cheap international/long distance route to its destination. Such services may build their own VoIP network to route calls, or they may just buy-in wholesale services from others, which might be VoIP or might be legacy services.

This part of the business is here to stay, because (a) those types of mobile tariffs are at the heart of telco strategies and (b) there is surplus wholesale capacity there to be exploited. Actually, the wholesale business is a very complex ecosystem, with legacy telcos both providing bandwidth to and buying-back bandwidth from specialized wholesale providers. These providers will use VoIP or anything else that is available and cost-effective, and their whole model depends on tracking the cost of the services they use and constantly changing in order to maximize profit.

Whether the “last hop” to the mobile handset is provided by SIP/VoIP is almost irrelevant. In theory, packet-based delivery should be an advantage in terms of providing differentiated services (e.g. presence, video, wideband), but mostly this potential is ignored in favour of going after the “cheap minute” business. It’s a paradox that so many of these services exist for smartphones: after all these are the wealthiest phone users, who’ve spent many hundreds of dollars on the phone, and will probably spend many more hundreds per year on call and data plans. How much money can they really be saving with services like Fring, relative to just buying a cheap handset and using a cellco-provided plan?

VOIP in mobile, 3G or Wifi networks helping business as well as individual users. But mobile network providers really fear the free usage of VOIP as there is no metering for calls as in mobile calls. VOIP even very cheaper and some time free for users in the same provider network such as skype. Important, but common feature in this scenario is cost of 3G. While considering the cost of 3G usage, VOIP cost is a minute fraction only in that. If mobile providers (usually they are 3G providers), consider 3G usage with high bandwidth and huge usage limits, VOIP usage will be increased and hence conventional phones will come to an end. Finally the cost of mobile calls (VOIP) will be reduced further. I only fear conventional phone systems may come to an end.

From what we can see, VoIP, or voice in any form, will continue to become nothing more than an application layered on top of the data network going forward. It already comes in the form of hosted, open source, voice over MPLS, etc. The different forms of voice completely depend on customer needs: geographic presence, number of locations, number of people at each location, budgets, cash flow, internal IT staff, internal telephony expertise, number of sales and executive personnel out in the field, treatment of customer service calls, etc.

Of course VoIP will continue to thrive...but will morph into various vehicles, especially VoMPLS and further SIP development. Mobile is making headway but as long as there are brick and mortar offices there will always be a need for some form of traditional VoIP...and I don't see virtual offices totally replacing brick and mortar for quite some time.