VoIP Benefits and Obstacles
Nassia Hanewich
Director, South East Europe
iBasis Overview
700
#1 International Wholesale Carrier*
Minutes In Millions
600
500
400
• One of 10 largest carriers of
300
international traffic
200
100
• Global Footprint – The iBasis Network
0
– 90 countries; 700 PoPs
– 160+ international carriers
• 2002 Revenue (est.): $180 - 200 million 45
40
• Annual run-rate > 2.5 billion minutes
35
• Average daily minutes: 7.6 million
30
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Revenue In Millions
25
20
15
10
5
0
* Atlantic-ACM 2002 Carrier Report Card
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
iBasis Named #1 International Wholesale
Carrier
Overall Score:
5.25
5.5
5.75
6.0
6.25
6.50
6.75
7.0
Atlantic-ACM
2002 International Wholesale Carrier Report Card
One of the Top International Carriers
Worldcom
ATT
British Telecom
Deutsche Telecom
France Telecom
Sprint
C able & Wireless
Telecom Italia
iBasis
Swisscom
C hina Telecom
Telefonica
Bell C anada
PC C W HK Telecom
PTT Telecom (KPN)
Teleglobe
Singapore Telecom
TelMex
KDDI
0
2000
4000
6000
8000
millions of minutes
Source: Telegeography 2002
*iBasis based First Half ‘02 traffic volume
10000
12000
14000
International Telecom: Large and Growing
Indicator
Revenues from Int’l Traffic
(billions of US$)
Minutes of Int’l Traffic
(billions of min.)
Countries Permitting
Competition
Top 20 Carriers’ Share of
Traffic
Market Share of New Carriers
Source: Telegeography 2002
1990
1995
2000
$37
$55
$70
33.5
61.6
132.7
6
18
49
72%
50%
5%
31%
86%
<1%
Explosion in Worldwide VoIP
$5
Worldwide Wholesale VoIP
Revenues (Billions $US)
100
$4
80
$3
60
$2
40
$1
20
$0
0
2001
2002
2003
2004
2005
Worldwide Wholesale VoIP
Minutes of Use (In Billions)
2001
2002
2003
iBasis has 13% share of Int’l VoIP Traffic
IDC, IP Telephony Market Forecast 2002
2004
2005
iBasis Services
• International Wholesale Voice Services
Origination and termination of voice and fax traffic
• IBOxpress
Enables Carriers to Originate and terminate
international traffic and prepaid traffic over the iBasis
Network w/o capital expense
• IP CallCard
A full turnkey prepaid & postpaid platform leveraging
the iBasis IP infrastructure
• ConnectPoint Global Access services
Local access numbers that terminate to service
providers’ platform, conference bridges, prepaid
server or IVR in any location and country
Breadth & Depth of International
Coverage
Meet carriers needs
• Comprehensive outsourced worldwide
coverage
• Full country coverage with overflow capacity
& redundancy
• Termination in select destinations using
iBasis direct routes
Match carriers’ requirements
• Competitive prices
• Completion rate
• High quality
The iBasis Network™
Largest International Cisco Powered Network for Voice on the Internet
Network
Operations
Center
(Burlington)
Network
Operations
Center
(Hong Kong)
Over 700 Points of Presence
in 90 Countries
Internet Central Offices
Internet Branch Offices
Challenges facing
South East European carriers
• Diverse regulatory frameworks and markets
• Low teledensities and underdeveloped infrastructure
• Lower level of foreign investment
• Rapid progress towards modernization & liberalization
• Growing demand for services
International VoIP: Strong and Growing
• Improves service
margins
• Penetration on many
routes exceeds 20%
50%
90,000
45%
80,000
40%
70,000
35%
60,000
30%
50,000
25%
40,000
20%
30,000
15%
20,000
10%
10,000
5%
0
0%
• 6% of global traffic –
double the level in 2000
0
20 0
0
20 1
0
20 2
0
20 3
04
20
05
20
06
• Quality indistinguishable
from PSTN
100,000
20
• Provides competitive
advantage
million MOU
• Efficiently expands
global reach
Million MOU
Source: TeleGeography 2002, Probe Research 2001
Penetration
penetration
International VoIP Forecast,
2000-2006
Global Circuit-switched Deployments Shrinking
Global Equipment Sales, 2000-2006
Circuit Switched vs IP
$2
$15
$2
$10
$1
$5
20
00
20
01
20
02
20
03
20
04
20
05
20
06
$0
Circuit Switched Equip
IP Toll Gateways
Source: Wintergreen Research 2001, IDC 2001
$US billion
$3
$20
$US billion
• VoIP equipment
deployments growing
$3
$25
• Circuit-switched
equipment deployments
declining
$1
• VoIP being adopted by
leading carriers
$0
–Cable & Wireless
–BT
–SBC
–China Unicom
–Sprint
VoIP: A Worldwide Phenomenon
Average Annual Growth of VoIP Minutes
%
Worldwide VoIP Growth 57% (total traffic growth 15%)
120
100
80
60
40
20
0
N America
Latin Amer
W Eur
Origination
E & S Eur
Af & M East
Asia Pac
Termination
VoIP Growth Rates by Region
2000 - 2006
Source: Probe Research 2001, TeleGeography 2002
Same Trend Underway
in South East Europe
Varying markets
Same VoIP Benefits
•
Regions
•
Lower costs
•
Regulations
•
Improved service
•
Infrastructure capacities
•
Increased access &
•
Economic development
•
Culture and history
connectivity
•
Advanced technology
transfer
•
Economic development
South East Europe Seeing Growth in
VoIP Termination
International Inbound VoIP Traffic
900
minutes (million
800
700
600
500
400
300
200
100
0
2000
2002
Croatia
Greece
2004
Turkey
Bulgaria
2006
Romania
Source: Probe Research 2001
VoIP Origination Also Growing
International Outbound VoIP Traffic
1,000
minutes (million
900
800
700
600
500
400
300
200
100
0
2000
2002
Croatia
Greece
2004
Turkey
Bulgaria
2006
Romania
Source: Probe Research 2001
VoIP Penetration in South East Europe
50.0%
• VoIP penetration will
increase four-fold in
the next five years
45.0%
40.0%
35.0%
30.0%
• iBasis traffic in the
region grew 217%
from Q3 00 to Q3 01
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2001
Inbound
2006
Outbound
International: Not Core for Most Major Carriers
% Revenue from International Traffic
30%
25%
20%
15%
10%
5%
Source: TeleGeography 2002
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0%
Major Carriers Adopting VoIP
ARGENTINA
OTEnet Case Study
• Interconnection with The iBasis Network for global
Internet Telephony since 2001 OTE, the national
carrier of Greece was privatized
• Accelerate creation of a new, fast-growing
international service, offered by the OTE ISP
subsidiary, OTEnet
• Over past 8 months, The network has supported a
nearly ten-fold growth in OTEnet’s international
traffic.
• OTEnet routes international voice traffic over The
iBasis Network through an iBasis Internet Branch
Office (IBO) facility, enabling an efficient, low cost,
high quality IP-to-IP interconnection
The Move to VoIP in The Region
• Predicted to post four-fold growth in VoIP
traffic by 2006 (Probe Research 2001).
• iBasis provides international service in
Bulgaria, Greece, Romania, and Slovenia
• More than 45 European carriers are
connected to iBasis for international service
• Traffic growth in Southeastern Europe: +
173% from 2000 to 2001
VoIP is Poised for Growth
• Governments see VoIP as “Leapfrog” technology, growth
driver
– China
– Latin America
– Africa
– Central & Eastern Europe
• Opportunities to capture new revenues
– International service expansion
– Value-added services
• Carriers outsourcing international service to VoIP providers
to focus on “core” domestic businesses
– Fixed-line
– Wireless, etc.
VoIP: Threat or Opportunity?
• Reduces capital expenditure, operational &
transport costs
• Helps manage settlements
• Provides instant global footprint
• Offers access to new markets
• Enables new services
• Delivers PSTN reliability & quality
Thank You