Even though it is only a miniscule part of the total telephony minutes used today, the IP telephony market will soar in the next four years, according to analysts. IP telephony—the real-time transmission of voice using Internet protocol—can be over either a public or private network. International Data Corporation (IDC) indicates that, of the total number of IP telephony minutes used in 1998, the top vendors are IDT and AT&T.
When measured by minutes of use, the market almost flatlines until 1999 but takes off for “respectable long-term growth” after 2000 , according to IDC. That’s consistent with the expenditures for voice and data equipment, which consistently rise from 1997 through 2002. Carriers and equipment vendors are working together to package voice lines with high-speed data.
SRI estimates that by 2002, IP telephony will grow to 5 percent of long-distance calling minutes worldwide but only 3 percent of total revenue (because of per-minute cost reductions). By 2003-04, the total revenues from software, hardware, products, and services are expected to be $14.7 billion worldwide, according to Piper Jaffray, and $9 billion according to SRI Consulting .
Called by IDC a “pivotal technology” with the potential to change the industry, IP telephony or Voice-Over-IP (VoIP) nonetheless must overcome some obstacles before it takes off, including call quality and possible conflicts with industry standards.
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