The Renaissance of Voice

 
Introduction
 
Innovations in voice communications technologies over the past decade have led to an interesting paradox: voice – once the flagship product of the telecom industry has become a commodity. Even though the volume of voice minutes has remained largely the same over the past few years, voice ARPU has declined by anywhere from 23-60% since 2005.  The transition to IP-based networks is largely responsible for the downward pressure on pricing, but the real impact of this change has been on the structure of the voice market itself. The once stodgy telephone industry is no longer recognizable. It has been transformed by nimble over-the-top (OTT) players – such as Skype, Google, and myriad VoIP providers – along with Microsoft, Apple, and dozens of technology start-ups into a hyper-competitive landscape. The traditional service providers are under pressure as their voice revenues continue to decline and business models decay, yet they remain relevant because they own networks and wireless spectrum.
 
New players are redefining the voice communications marketplace with disruptive technologies and new business models. The battles over pricing and bundles of services are becoming yesterday’s concerns, because the real economic driver is innovation. Just as voice has evolved from basic telephony over copper wires to voice over IP, we are now seeing an evolution towards voice applications that can run over multiple platforms and networks. Consequently, the battles will increasingly be fought over features and benefits of the applications; valued added services and accessibility; and strategic partnerships. Within this roiling ecosystem, we are seeing one of the most revolutionary business transformations in history. And as a consequence, voice has the potential to rise from the ashes of commoditization to ignite a growth market in new products and services for both consumers and enterprises.

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