Predictions for IP Communications Industry

Others have theirs. Here are few of mine.

First, let me list the predictions I made in 2004:

Minutes would be commoditized, cost approaches zeroThis was when Vonage was still charging $40/mo and people thought that was cheapB – it’s happening but we do have to remember there are still a lot of people paying $0.10/minute and there are places (e.g. India) where it won’t be free for a while (70% of SkypeOut destinations are over $0.10 per minute).
Regulatory Issues would be a nightmaregetting DIDs, LNP, CALEA. Coverage is still a major limiter for “replacement VoIP”A – it’s going to keep getting worse, especially in the US where incumbent telcos own the FCC
911 isn’t going awayVoIP players had their heads in the sand on this one.A – E911 is mandated and it is only the beginning
ILECs will retaliateI guess I was stating the obvious.C – I was expecting a tighter lock via forced bundling of DSL/phone (no naked DSL) and yet we’re seeing naked DSL emerge in a few parts of the world (and in those areas VoIP penetration is much higher). We can probably thank the Cablecos for that. In the US, telcos seem focused on a regulatory management strategy to drive costs up to run the VoIP players out of business or at least drasticly hurt them.
Many things the industry is worrying about are meaningless in the long runsession controllers, softswitchesC – the industry hasn’t figured this out yet. They are dumping tons of money into replicating the telco network. I’m still right – the world just doesn’t appreciate it yet :)
Consumers do not trust the InternetI was considering middle America hereB? C? – This one’s hard to judge. Is middle America switching?
Peering among VoIP players will evolveBGP in the ISP world was my referenceC? – Peering is talked about a lot, but still nascent in practice. No outcry from users either. Go figger (see cost goes to zero above).
LNP will be a nightmareEverybody else was sure LNP would be some kind of panaceaI’m giving myself an A+ on this one because it has turned out to be an absolute nightmare, and again, I expect it will get worse before it gets better
Data aisle and Telco aisle will converge in retail storesretail still doesn’t know how to resolve thisC – It’s happened at Fry’s but not at Bestbuy or Target. We see Vonage in the “phone” aisle but not much “telephony” in the data aisle. And in general, retail has only adopted “broadband phone” replacement services like Vonage. You don’t see generic ATAs, SIP phones etc. anywhere
Telephony can be a product, rather than a servicePerhaps too “revolutionary”F – Users don’t care. In fact they almost seem more comfortable with “phone as a service”, like they don’t trust it – “there must be a catch.”

Don’t like how I graded myself on the above? Feel free to comment/correct.

What about my 2007 predictions? Here you go:

  • Security, privacy, (voice-spam, voice-phishers), etc. will become more familiar and gain importance to users
  • Wi-fi dual-mode phones and FMC will emerge a little but, but will be less significant than many others predict for at least another year in terms of real deployments (lots of hype, but few real users).
  • Voice (e.g. Skype) over (paid) data channel on mobiles will be a flop, as minutes over the data channel will continue to cost more than minutes over the phone channel (combined with relatively weak penetration of data services to the mainstream mobile phone user – we forget not everyone is as bleeding edge as we and our circle of friends might be).
  • VoIP peering will plod along at a snail’s pace. Most VoIP companies bleed Telco blood. They think in terms of reciprocal comp, rather than Internet-style peering.
  • Interoperable VoIP continues to go nowhere. Users don’t care (witness Skype and Vonage success). VoIP probably gets more closed and less interoperable as those business models prove more successful (read fundable).
  • Skype phones this year will continue to suck – and no one will care. Skype users like PCs. Why would they want a phone?
  • Some people will realize “minutes aren’t free” and that you cannot call everywhere with Skype for 2 cents per minute (80% of SkypeOut destinations are over 5 cents per minute) and someone will make a business out of that.

The above were off the top of my head. I may post a follow-up with some more.

One thing that will be very interesting is what happens to Vonage when they need to go asking for more money. Some people think that may happen in 2007.