VoIP finds hope in Asia as times get tough

VoIP finds hope in Asia as times get tough

Steep price declines have decimated the ranks of VoIP (Voice over Internet Protocol). Telephone service providers in Asia-Pacific may finally be bottoming out in some areas, but the technology still is being used primarily for inexpensive long-distance calls, according to participants at iLocus Show Asia 2001.

The thin turnout at this year's event, with far fewer attendees than at the 2000 conference, reflected an industry that has seen rapid consolidation along with the tightening high-tech capital market of the past several months. Many service providers have been squeezed by declining margins and an increasing availability of once precious bandwidth.

VoIP technology allows voice calls, traditionally carried over circuits set aside on a public telephone network, to be transmitted as packets on the Internet or a private IP network. Because the calls become nothing more than data packets, they can be combined with data in new services, such as unified text and voice messaging, and virtual office phone systems spread around the world. Yet inexpensive transmission of calls across data trunk lines remains the primary application of VoIP.

The weeding out of carriers in this commodity-oriented business may finally halt the slide in call prices, according to two executives at the conference. VoIP call revenue is making a "rebound" in some markets in Asia-Pacific, according to Tetsuro Mikami, vice president of IP business development at NTT Communications's Arcstar Global Network Business Division, on a panel at the show. In an interview following the discussion, he declined to name the markets where this is taking place.

Another VOIP carrier executive agreed in part. Though prices are not rebounding, the steep drop may have slowed in some places, said Diarmid Massey, managing director for Asia-Pacific at ITXC, a major US based VoIP-only carrier.

"There's been a stabilising of prices. The drop in pricing has slowed down or stopped in some markets," Massey said.

Driven by growing demand for inexpensive long-distance services in China and to some extent in India, both just beginning to emerge from regulatory regimes that kept prices high, Asia is a big part of the future of VoIP, attendees said. Other countries in the process of opening up their telecommunication markets, including Vietnam, Taiwan and Indonesia, are helping to push VoIP forward, according to NTT's Mikami.

"This is the region that's booming - exploding," said Enis Erkel, vice president of VoIP products and network planning at Nortel Networks. He estimated one-third of the world's VOIP traffic is Asian traffic.

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