Telecommunications Industry Barbara Yener Janet Jonson

Telecommunications Latest Disruptive Technology Voice over Internet Protocol (VoIP) How it works: Converts analog voice signals to digital signal packets that are sent over the IP network using a series of software- and hardware- based codecs Converts analog voice signals to digital signal packets that are sent over the IP network using a series of software- and hardware- based codecs Codecs performs the translations from A to D and D to A as well as compresses the digital signal Codecs performs the translations from A to D and D to A as well as compresses the digital signal

Advantages of VoIP Lower wiring and installation costs Additions, changes and moves of telephones are easier Less specialized staff No switches needed Scalability and flexibility Click-to-Talk option Cost savings on long distance and international calls Cost savings on long distance and international calls

Cost Structures Traditional Providers Switching plants and line wire Switching plants and line wire Per minute fees Per minute fees VoIP Providers Internet transmissions Bypasses switching plants

Business Models Traditional Providers Cost per minute Cost per minute Flat rates Flat rates Bundle packaged deals Bundle packaged deals VoIP Providers Ad Revenue Model Charge/Fee Model Hybrid Model

Converging/Supplanted Business Models Large investments in fiber optics, plant and equipment Emergence of new types of providers Strategic alliances of companies within the chain Software application development

Sustainability Technical problems Establish consumer base Define business model

Broader Economy Changes Deregulation Faster, cheaper communications Consolidation of communications

Accounting Implications Consolidated accounting systems Cost allocations Role reversal of costs and revenues

Conclusions Is VoIP a disruptive technology? Is VoIP sustainable? Provider landscape Jury still out on VoIP