Top 10 Telephony Trends

Updated: May 05, 2009



2009 will be a survival-of-the-fittest kind of year, with economic stress accelerating natural selection among telephony service and product vendors. More pressure to adapt or die will produce more innovation, more cost savings, and more options for buyers.



1. Mobile broadband is booming. According to the CTIA (Cellular Telephone Industry Association), mobile data usage in the United States grew 42.5 percent in the 12 months ending June 2008. By 2011 the number of mobile broadband users will exceed fixed broadband users. In response, carriers have started working more closely with telecommunications providers to optimize their mobile broadband infrastructures.

Customers will see more uses for mobile broadband including video conferencing and collaboration applications previously confined to desktops. Smart phones will proliferate and become more versatile. Security concerns will multiply as even more vulnerable endpoints are added to corporate networks.

2. Carriers will become customizable. "Telecommunications will undergo a sea change as operators aggressively reduce complexity, and search for innovative ways to streamline costs," said Georges Antoun, chief executive officer of Redback Networks. A la carte, on-demand pricing will replace expensive, long-term contracts. Corporate customers will be able to tailor telephony services to an individual employee's needs, saving money by not buying standard packages whose feature sets go partly unused. End users themselves will be able to configure their telephony services via Web-based self-service kiosks.

3. Convergence will continue to save corporate customers money on network infrastructure and management costs. Voice, data, and video will seamlessly integrate in desktop, conference room and mobile endpoint products. Corporate customers will invest in infrastructure that takes full advantage of convergence, replacing legacy stand-alone equipment and application software.

4. Software developers will control more phones. Apple's iPhone and Google's Android are examples of cell phones controlled by developers rather than carriers. This increased competition will produce a torrent of innovation among carriers and developers, resulting in lower prices, more options, and greater functionality for end users. "Unlocked" phones that can be switched from carrier to carrier will become the industry standard. Customers will no longer be captives.

5. Prepaid phone plans will become chic. No longer are prepaid cell phones only for the credit-unworthy, drug dealers, and terrorists. Consumers are saving $15 to $25 each per month by dropping expensive, long-term contracts with unused minutes and message allotments. Business customers will add up the potential savings for their employees and find that frugal is smart.

6. VoIP as a service will catch on. Customers are turning to SaaS (Software as a Service) vendors such as 8x8, Inc., to provide the benefits of converged VoIP without the up-front expense of infrastructure and ongoing costs of network management and upgrades. We are going to see desktop VoIP handsets become universal plug-and-play appliances, able to tap the power of any service provider's network. VoIP-as-a-service will come into the business as a utility, just like Internet bandwidth or electricity. This platform neutrality will enhance competition, but prices will not come down that much except for commodity voice minutes, text messages, and so forth. Instead, service providers will add more value to their offerings.

7. Service providers will push "HD (high definition)" VoIP. By sampling analog voice input twice as frequently, HD VoIP produces a digital voice data stream of exceptionally high fidelity. But just as televisions have to be replaced to take full advantage of HDTV, HD VoIP requires major investments in new equipment everywhere along the voice traffic line — from carriers to corporate networks to desktop appliances. Before buying a vendor's HD VoIP pitch, make very sure your voice service partners can support HD VoIP.

8. VoIP service providers will add SFA (Sales Force Automation), CRM , and other high-value applications. As the commodity price of talk minutes plummets to "free," carriers will compete or partner with the likes of and SugarCRM to offer value-added services through their networks. So will software developers of IP PBX applications. Eventually, everybody from SAP to your prepaid cell phone service provider will be offering elaborate ERP platforms accessible from a smart phone.

9. Voice-to-text transcription is on the rise. This trend is a two-edged sword: It costs money for human-assisted transcription, about $5 per month for 30 messages. It saves end users time, which is money. But there's a transcription delay built into the transmission process; time is saved in processing and lost in sending/receiving. It's just a matter of time before a transcription error costs somebody a major deal or significant embarrassment. But users want voice-to-text transcription, and its bugs will shake out.

10. Equipment vendors and service providers will experience a big shakeout. The economic downturn will be brutal on startups that depend on venture capital to sustain them while they build a user base on free services and then up-sell premium services. Smaller hardware and software vendors will be acquired by large ones and their products integrated into ever more complex enterprise packages. Some products will not survive assimilation, so be careful what you buy.

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