Telcos failing to develop IP strategy

The telecoms industry is facing some tough decisions

The continuing rise of IP-based services is one of the biggest concerns for global telecoms executives, according to research by VoIP provider Jajah.

The company's Telecommunications Industry Issues Index highlights the consensus that IP-based services will be the source of future revenue growth for telcos.

But it also highlights a lack of certainty about how to confront such services.

The primary fear among most carriers is the growing churn in landline connections.

In most cases IP-based value added services and new pricing strategies are seen as having the best potential to replace lost revenue, although many companies have yet to define an IP strategy.

Jajah reckons that many carriers are unsure of how to deal with the perceived threat from 'new-style' competitors, and that two-thirds are more concerned about Google than new triple-play entrants.

"Convergence has been the keyword for the past decade, but IP platforms are coming to maturity and many traditional organisations have yet to define their go-to-market strategy," said Phil Kendall, director of the global wireless division at Strategy Analytics.

"As consumers crave new forms of communication and voice-bundled services, it is not surprising to see many chief executives putting these issues front and centre.

"Jajah's findings are a dramatic example of how under prepared many companies are to deal with the industry shift."

Recent figures from Ofcom showed that the number of landlines in the UK fell by five per cent to 34 million last year, while the number of mobile-only households rose 13 per cent.

"Service bundles, technology convergence, increasing global competition and decreasing margins are driving a major shift in the telecoms industry," said Trevor Healy, chief executive at Jajah.

"It is really encouraging that the biggest companies in the industry are embracing the concept of IP telephony as a source of revenue protection and growth."

The report concludes that the industry is facing some tough decisions that have to be made quickly.

Organisations need to move away from the race to lay pipes, to the new battlefield of value added services where preservation of customer base and growth of revenue are the goals.