The communications industry has returned to profitability but developments in Internet technology are challenging the role and business model of traditional telecoms companies, creating pressures for a new approach to industry regulation, according to the OECD's Communications Outlook 2005.

The growing popularity of Internet telephony, or Voice over Internet Protocol (VoIP), threatens the fixed-line revenues of traditional carriers, especially for international calls, the OECD report concludes. In addition, however, VoIP presents a challenge to mobile telephones, which in many countries are now more numerous than fixed connections.

In 2003, for the first time ever, the number of fixed phone lines actually fell in OECD countries, with mobile operators gaining market share at the expense of the traditional telecoms companies, a trend which continued in 2004 and 2005. As for Internet telephony, a comparison of the cost of calls via Skype, a VoIP provider, and via traditional fixed-line carriers in OECD countries revealed an average saving of 80% using Skype, according to the OECD report. On a per capita basis, Denmark, Poland and the Netherlands are the largest users of Skype.

Looking ahead, the OECD predicts that new service offerings from traditional carriers, such as Wi-Fi hotspots in cities, will provide tougher competition for 3G mobile operators than these had been expecting when they obtained their licenses, in many cases for large sums. To maximize revenue, the report suggests, 3G operators may need to change their charging policies, for example by persuading customers to sign up for longer term contracts rather than purchasing calling time on an ad hoc basis, as is presently the case for a large percentage of customers relying on pre-paid cards.

Among other things, the report forecasts that:

- Service operators will increasingly offer integrated video, voice and data products in a single service package.

- The growing popularity of downloading video from the Internet will reduce the time people spend watching free-to-air TV, driving down audience share and advertising revenue for broadcasters and making it harder for public-service broadcasters to meet their social policy objectives.

- Increasing competition from new platforms, notably broadband Internet, with traditional broadcast or telecoms providers may require a re-examination of existing regulatory frameworks. In particular, regulators may need to review obligations regarding universal telecommunications service as more companies offer telephone services over the Internet without having a physical presence in a country.

1. Posted by fcofer	Fri Jan 27, 2006 4:57 pm
I wonder if both VoIP (via WiFi) and GSM will be functionally available, say with Nokia E70. What I want is the ability to use either.
2. Posted by Erris	Mon Jan 30, 2006 7:50 pm
It is iwth the Nokia E-series that are coming out first trimester this year. Nokia E60 and E70 I am waiting for those phones myself
3. Posted by jmax529	Tue Jan 31, 2006 6:54 pm
i seriously doubt voip will fully replace todays networks. international voip quality is poor at best very few phones support it now anyways.
4. Posted by GSMDude	Fri Feb 03, 2006 7:11 pm
I've been hearing the VoIP projection for the longest time. I'll believe it when I see it.
5. Posted by mgoblue	Wed Feb 08, 2006 1:00 pm
Skype is already teaming up with phone manufacturers. It'll be here sooner than you think.
6. Posted by Jadall	Wed Feb 15, 2006 12:02 am
I'm sorry but pay the phone company or a cell company hundreds of dollars and can do it on voip for 20-30$ a month with tax. sorry phone company but you going down!!!.. and voip multifunction cell phones are a great idea. I like that about getting people to sign long contracts next time i sign any contract for a phone company wireless carrier etc i'll be like yeah in 5 years no one will be using this technology.
7. Posted by Erris	Wed Feb 15, 2006 10:42 am
I really hope that VOIP will take over not only land lines, but cell phones too. The prices we have to pay for few huyndred minutes is ridiculous. Not even mentioning the "privilege" to download a few pictures or a video over the cell phone's network. Wi a Wi-Fi phone and a good coverage Wi-Fi networks one can download whatever from the internet and talk for free today even. I realise a good WI-Fi coverage will take along time to establish, but I hope it will come sooner or later.

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