Telephony Forecast for 2005

VoIP
Voice-over-IP technology will continue its rapid ascent   toward eventual domination of the still reigning killer app of the telecom sector--voice service. Look for even more VoIP entrants, plummeting prices for consumers and a continuing struggle for differentiation among service providers. Expect security and reliability to become increasingly important, particularly in the enterprise, and for enhancements like wireless to become more desirable and available to all customer segments.

Broadband
This is the market that continues to grow considerably.  Broadband market share will be critical as more intelligence is added to the pipe in terms of packaging content delivery.  This is the platform in which the provider will sell other services to enhance their revenue streams

FTTP and Video
Watch as long-awaited fiber network extensions finally come to fruition, making telecom service providers viable competitors in the video services sector. Developments to watch include differences over networking format for telco video (IP vs. RF), the ongoing debate over whether the acronym should end in premises, curb or home, and the inevitable response of the cable operators. (Will that include a wireless play? See next entry.) Also keep a close eye on independent telcos in smaller markets as they make strides in the video market--some without fiber to anything.

MVNOs
Another highly anticipated development, this one in the wireless services sector, will enjoy prominence in 2005. Enablers of mobile virtual network operators theoretically allow just about any brand with some consumer visibility and the money to spend to break into the wireless racket. That includes cable operators, many of which need wireless lines of defense as telcos invade their video turf. Also watch for increasingly targeted and customized wireless services aimed at specific demographic and regional markets.

Wireless Consolidation
Driven in part by the aforementioned MVNO trend that's making the wireless market an increasingly crowded place, the big-iron operators of wireless networks are already starting to join forces. Watch for the ongoing commoditization of mobile voice applications, making enhanced applications and services increasingly important to service distinction and revenue generation. Also expect the resulting U.S. mobile behemoths--which may be down to four by early 2005, if the Sprint/Nextel combo proceeds as planned--to make luring network-less MVNO hopefuls to their extensive network facilities a major strategic component.

WiMAX
Will 2005 finally be the breakout year that proponents of broadband wireless have been hoping for? Probably not, but if standardization plays out as planned and the big names and monetary support behind WiMAX continues, look for this networking format to prove itself in the next five years as a viable broadband contender for certain configurations--both in North America and worldwide.

Regulatory Uncertainty
Underlying, driving--and potentially threatening--all of the above is the very real possibility of a re-re-write of the regulations governing telecom competition. Will another interpretation of the rules help or hurt the broadband economy?

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