Connections +
News

Telco exec warns of a VOIP ‘black hole’

The CEO of telecom equipment manufacturer DeTeWe AG & Co. today warned that upwards of 40% of the free cash flow cu...


December 15, 2004  


Print this page

The CEO of telecom equipment manufacturer DeTeWe AG & Co. today warned that upwards of 40% of the free cash flow currently generated by the telecoms operators could disappear by 2007 as a result of the move to Voice over Internet Protocol (VoIP).

Nadahl Shocair estimated that telcos around the worlds currently generate an estimated US$450 billion of combined free cash flow annually.

"The black hole of Voice over Internet is going to claim at least 30-40% of this," he said. "Disruptive technologies – namely Voice over Internet Protocol — from providers like Vonage and Skype promise to batter the incumbents’ revenues at an alarming speed as IP telephony takes off.

"As the voice and service quality of VoIP improves, the enterprise market — seen by many as the saviour for the incumbents in terms of keeping revenues alive will also switch to IP — probably in the form of managed IP services. These are interesting times, unless of course you’re an operator relying on traditional circuit-switched voice revenues."