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Plans to implement VoIP soaring, according to global survey of senior executives

A majority of corporate executives now predict that they will implement Voice over Internet Protocol (VoIP), accord...

September 22, 2004  

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A majority of corporate executives now predict that they will implement Voice over Internet Protocol (VoIP), according to a new survey and report on networking and business strategy from AT&T Corp. in co-operation with the Economist Intelligence Unit (EIU).

VoIP, the ability to transmit voice calls over the Internet and IP-based data networks, means companies can carry calls within their own enterprise on
their own networks, bypassing traditional telecom providers and avoiding toll charges.

The additional promise of greater functionality and flexibility than conventional fixed lines finally positions VoIP as a true rival to the dominance of today’s fixed line telephony, the study concludes.

“The question is no longer if but when VoIP will become the new standard for voice traffic,” says Cathy Martine, AT&T’s senior vice president of Internet telephony.

The EIU survey of 254 senior executives worldwide on the future of corporate networking reveals that 43% of respondents report that they are currently using, testing or planning to implement VoIP within the next two years, and another 18% believe they will implement it in the long term.

According to the survey, market forecasts reflect the same bullishness. Research firm Gartner Dataquest predicts that retail voice revenue from today’s public switched telephone network (PSTN) will drop slightly through 2008 while retail VoIP revenue will soar by 38.6% over the same period.

After 10 years in development, VoIP has grown up,” the survey says. The major barrier to adoption had been hurdles in VoIP’s performance, reliability and security.

“Cost studies are now easier to perform, savings are more predictable and the questions of quality and reliability have now largely been addressed thanks to the development of international standards and stable software and
hardware solutions,” says Martine.

Specific savings realized through VoIP can be significant and varied, the study says.

“Moving voice to IP allows companies to merge two disparate existing networks — one for fax and phone, the other for data and multimedia-that they currently have to maintain separately at considerable expense.

“Running them together allows not only for reduced capital expenditure but also of operating expenditure through the consolidation of maintenance, administrative and support functions.”

The EIU is the business information arm of The Economist Group, publisher of The Economist.