Telecommunications Industry

1
Telecommunications Industry

• Barbara Yener
• Janet Jonson

2
Telecommunications Latest Disruptive Technology

• Voice over Internet Protocol (VoIP)
• How it works
• Converts analog voice signals to digital signal
  packets that are sent over the IP network using a
  series of software- and hardware- based codecs
• Codecs performs the translations from A to D and
  D to A as well as compresses the digital signal

3
Advantages of VoIP

• Lower wiring and installation costs
• Additions, changes and moves of telephones are
  easier
• Less specialized staff
• No switches needed
• Scalability and flexibility
• Click-to-Talk option
• Cost savings on long distance and international
  calls

4
Cost Structures

• Traditional Providers
• Switching plants and line wire
• Per minute fees

• VoIP Providers
• Internet transmissions
• Bypasses switching plants

5
Business Models

• Traditional Providers
• Cost per minute
• Flat rates
• Bundle packaged deals

• VoIP Providers
• Ad Revenue Model
• Charge/Fee Model
• Hybrid Model

6
Converging/SupplantedBusiness Models

• Large investments in fiber optics, plant and
  equipment
• Emergence of new types of providers
• Strategic alliances of companies within the chain
• Software application development

7
Sustainability

• Technical problems
• Establish consumer base
• Define business model

8
Broader Economy Changes

• Deregulation
• Faster, cheaper communications
• Consolidation of communications

9
Accounting Implications

• Consolidated accounting systems
• Cost allocations
• Role reversal of costs and revenues

10
Conclusions

• Is VoIP a disruptive technology?
• Is VoIP sustainable?
• Provider landscape
• Jury still out on VoIP