The role of VoIP
in Telecommunications
15 January, 2007
Kim, Geunhyung
BcN Unit
KT
1
I
Value Changes in ICT
II Current Comm. status in Korea
III Re-consideration of Voice
IV Challenges for New Growth
V
ITU-T (Future of Voice)
Concluding Remarks
2
Value Changes in ICT
Value Flow Changes
Producing
High
> 5.0
Google (16.2)
Ebay (9.5)
Yahoo (7.9)
Microsoft (5.2)
Packaging
Delivery
Window
/Service Providing
Packaging or Window
/Service Providing
5.0
4.0
3.0
Market Value
Sales
Value in-flow
Disney (2.0)
2.0
Delivery
(Traditional Comm. domain)
1.5
Value dragging
1.0
KT (1.4)
KTF (1.4)
0.5
Value out-flow
Low
0.0
High
Operating Profit Growth
* Source: Mercer Value Migration Database
ITU-T (Future of Voice)
3
Low
Value Changes in ICT
Close Look at Value Flow of Delivery
Communications global value migration
100%
Wireless
80%
Share of
overall 60%
value
(in %)
Wireline
Traditional Carriers
40%
Wireline
Non-Traditional Carriers
ISPs
20%
Cable / Satellite
0%
1990
1995
2000
2005
* Source: Mercer Value Migration Database
Exponential value in-flow in Wireless, Cable/Satellite and ISP industry
More 50% value out-flow in Wireline-traditional Carriers during recent 5 years
ITU-T (Future of Voice)
4
Current Comm. Status in Korea
PSTN Voice Market Status
Market saturated & threatened by Mobile & VoIP
Subscribers & CAGR
Subscribers(unit: 1,000)
Market Share Ratio
23,099
23,000 21,930
21,000
Hanaro Telecom(6.6%)
LG Dacom(0.2%)
15,000
10,000
3.62
3.37
0.22
5,000
0.74
KT(93.2%)
-2.61 -0.03
0
2000
2001
2002
2003
2004
Num of Subscriber
2005
2006.11
CAGR (Percentage)
Source : MIC (Ministry of Information and Communication) 2006.11
not a significant change regarding CAGR
despite great progress in FMS, not a noticeable migration witnessed in full swing
ITU-T (Future of Voice)
5
Regulatory of VoIP in Korea
Current Comm. Status in Korea
VoIP operators need a permission or a registration to
operate
QoS requirement to grant using 070 number
R >= 70, end-to-end delay <= 150 ms, call success ratio >= 95%
unbundling of the local loop
New entrants do not have to provide their own access network
However, they pay for the use of other operator’s access network
MSO was authorized in last November to operate
It may accelerate the bundling
ITU-T (Future of Voice)
6
Titanic clash in voice market
Re-consideration of Voice
Titanic clash btn. the Internet & the Telecom. industry
migration of voice ovier PSTN onto
VoIP
(migration from PSTN to IP network)
Integration of voice onto Internet
(IM, Skype, Jajah, etc.)
DVD Cover - Clash of the Titans Amazon
DVD
ITU-T (Future of Voice)
7
Re-consideration of Voice
Threaten or Opportunity ?
The Voice Long Tail
Substitutive Opportunity
Advanced VoIP (Value added VoIP)
■Video telephony, High quality voice telephony,
■FMC etc……..
Threaten
Frequency of Contact
free basic voice service
New Opportunity
Web applications with voice
■ voice enabled E-commerce
■ vertical applications like Real Estate, etc…
Threaten
free basic voice services
PSTN
Online Communications
Potential Connections
ITU-T (Future of Voice)
8
Re-consideration of Voice
Consideration of Voice
Voice is still the “Killer Application”
Value of Voice
The needs for live communication are far
deeper than other forms
Voice is still money-making commodity
Q) Why is Voice ARPU dropping ?
Customer’s behavior
If people can get the same service cheaper
than elsewhere, they will.
Price fell, voice usage skyrocketed
Increased competition
Fundamental shift in how “value” is realized
If you can’t cheaper, you must be
better.
ITU-T (Future of Voice)
9
Re-consideration of Voice
Evolution of Voice
As VoIP offers enhanced features and becomes more
widespread,
Customers’ usage pattern of VoIP will vary significantly
customers will be segmented
The past : operator-centric
The future : user-centric
voice in telephone
voice in everything
same services & phone for
everyone
customized services & GUIs
application-driven
price-driven
convergence of
separation of
communication, information,
entertainment
communication, information,
entertainment
ITU-T (Future of Voice)
10
The incumbent’s challenges
Re-consideration of Voice
retaining of subscribers
maintaining profitability and retaining customer loyalty
Segmentation, Branding, & service bundles
making rich services for ARPU increase
Voice applications
VoIP enabled IT applications
Integrated service of voice and the internet (web)
Personalized Context-aware services
An enhanced interaction is established (user-touser, user-to-machine, user-to-content)
Context : any information that can be used to characterize the situation of an entity (person, place, object, …)
[by Dey, A.K., 2001]
ITU-T (Future of Voice)
11
KT’s challenges for new growth
Challenges for New Growth
Differentiated new services with managed function
Personalized &
Differentiated
Services
Convergence services with multi-Windows
Managed
Function
/Platform
Manged
Network
ITU-T (Future of Voice)
Personalization
HomeNetwork
RGW
QoS
FTTH
12
Broad
BW
WiBro
Security
BcN
U-Comm : unified communication
Challenges for New Growth
Personalized Application & FMC Services
Voice
PBX, Audio Conferencing
&
Data
IM, E-Mail, Web Conferencing
Unified
VPN
Communication
Community, Blog
Information, Entertainment
Films, Music, Drama
Personalization
FMC
Context
PSTN Number
Rich
Communication
Education, Medical care, Security
Needs more managed function
Personalized services : communication, application services, personal portal, etc..
- linking PSTN customer with internet community, expansion from home to person
QoS : exclusive possession of service quality control and service context
ITU-T (Future of Voice)
13
WiBro : basis of mobile convergence
Challenges for New Growth
A vision for personal broadband : m-TPS
Old Digital Paradigm
Wired
Internet
Wireless
Internet
New Digital Paradigm
Limit of
Mobility & Real-time
Real-time Mobile Service
KT WiBro
High Cost , Low Speed
Wireless All-IP
BB Multimedia Service
Affordable Price
Mobile-TPS
Personal Broadband
Media
Communication
Data
Needs more managed function
Broad BW : Higher data rate than 2.5G network
Personalized services : LBS & personalized information service (push & pull), etc
QoS : Packet scheduling for resource reservation
ITU-T (Future of Voice)
14
Considerations of future voice services
Concluding Remarks
re-creation of the value of voice
something other than just voice : enhanced voice quality etc..
network-based service which only the network operator can provide
user-centric convergence service – personality, simplicity, predictability
Managed Broadband network
new authentication platform – basic platform for personalized service
Premium network (BcN and QoS manager) – premium & convergence service
new services strategy using BcN like U-Comm
ITU-T (Future of Voice)
15
Thank You !
ITU-T (Future of Voice)
16