FYI | Apr 11 2006
Voice over internet protocol (VoIP) can be loosely separated into two categories – soft and hard. Using downloaded software and a plug in microphone on your PC to talk, via broadband, to correspondents with the same set-up is the soft form. Having an actual handset and phone number as provided to again transmit via broadband is the hard form.
Soft VoIP has already been made popular by the likes of Skype, Google Talk and iiPhone. Primus, iiNet and Optus are all planning hard VoIP offerings.
When customers take up the new, far cheaper technology Telstra (TLS) will lose local, national, international and fixed-to-mobile revenues. Say bye bye.
When Telstra itself introduces VoIP, it will still have lost revenues it cannot recover. The telco is desperately introducing unlimited subscriber packages for fixed-line customers, but it’s a bit like stoically offering cheap deals on horses to challenge the Model T Ford.
UBS analysts have been doing some number crunching. They calculate Telstra will lose 14-72% of retail and wholesale voice ARPUs (average revenue per user) from a customer that switches to the readily available soft VoIP, and that number rises to 90% or more if the customer chooses wireless or Optus HFC broadband.
If customers move to hard VoIP, Telstra loses 60-87% of ARPUs, says UBS.
The conclusion from UBS is that it makes no difference what service or operator customers choose to use, it is simply VoIP itself that will put a big hole in revenues.