Sunday, March 06, 2005

Correlation Equals Cause

VoIP is one of those hot-button technologies. All you have to do is stick it in a press release, and the media's critical facilities go out the window. Instead, the hacks and proxy publicists will not only run with the press release, they'll also run up a heap of bromides inserted into the stories using the Disruptive Technologies Phrase Grabber.

Hence when Telstra (Australia's incumbent telco) said it's trialling a consumer VoIP service, the press in Australia went nuts. But in seeking to wrap their own commentary around the story, the flacks also tossed reality out the window.

For example:
"The announcement comes as existing VoIP products from relatively small telecommunications players begin to proliferate and eat into Telstra's PSTN voice calls market. Telstra's revenue from fixed line voice calls has been on a steady decline for some time, while its broadband revenue continues to grow." (here).
(My emphasis.)

Stan Beer goes on that:

"In addition to voice over broadband, Telstra plans to offer users enhanced VoIP services such as click-to-call, email notification of voice mail, a self service web interface for management of calls and functions and multimedia services such as video conferencing."

In the normal course of events I don't expect great technical accuracy in how media reports telecomms. But since the Beer Files bills itself as the "most informative" source, let's go hog wild. Voice-over-broadband is not identical to Voice-over-IP, since you can deliver a PSTN service on a broadband connection (as Optus can be argued is doing with voice on its HFC network, or in the business space as PowerTel definitely does with Voice-over-DSL).

Most VoIP services, which Beer says are offered by "small telecommunications players", are arguing long-and-hard to convince the world that they're not telcos. And most of the "enhanced VoIP services" he lists are not specific to VoIP (although I can't blame a journalist for believing years of inaccurate puffery). They are CTI - computer telephony integration - functions, and can be done on non-VoIP environments.

But the howler is in the assumption that Telstra's revenues are already suffering at the hands of VoIP.

Note, by the way, the contradiction in the author's remark: although the VoIP market is a new phenomenon, PSTN revenues have been falling "for some time".

Let's grab Telstra's last results announcement: did the PSTN call revenues fall?


Have they been flat or falling for some time?


Has VoIP been a competitive market long enough to explain this?

Yeah, right.

The PSTN decline predates the VoIP revolution. The usual explanation is "mobile substitution", and it's no coincidence that mobile revenues are growing faster (up $156 million last half-year) than PSTN call revenues are falling (down $89 million in the same period).

It's fine to think that VoIP is a future threat. To treat it as a phenomenon that's already on the Telstra balance sheet? I doubt it.

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