VoIP Market in China, 2005

VoIP Market in China, 2005

In China, broadband IP phone has become a new major means for operators to share in voice market especially distant call market. Each of the telecoms companies in China has its own soft switching equipments to offer voice services. It's estimated that various value-added data services are also to be carried out under the fierce competition. In 2004, there were tens of thousands of operation level traditional switching equipments retired, which caused huge equipment gap that was to be made up by the soft switching equipments. Besides, many private communication networks are also running voice, data and video services in China. All this shows that China has possessed the fundamentals as well as the opportunities and market to vigorously develop broadband IP phone. As demand for new communication services from users increases gradually, it is believed that broadband IP phone will soon become a bight point in China's communications field.

Broadband IP phone is based on IP technology, broadband network and IP terminals. It's a new type of telecommunication service platform integrating voice and data. Presently broadband IP phone implemented in China has completely abandoned traditional double-line wire. Using VoIP technology and steering clear of CPN, telecommunication operators, offering broadband telephone service, only need to construct a business platform integrating voice, data and video, then users can communicate with any telephone terminal by way of relative terminals. Because broadband telephone needs less switching equipments than traditional telephone, the operation cost is greatly reduced, thus operators have the natural advantage of fee-charging. In April 2005, AOL formally carried out VoIP business in 40 markets throughout the U.S. Microsoft has also entered the market by cooperating with AT&T, Amdocs and Sylantro earlier in July this year. Although greatly impacted by VoIP, the traditional telephone companies would not stand by. Verizon, the biggest telecoms in the U.S., has carried out its VoIP service. SB and BellSouth have both announced that they are trying to get a share in this market. VoIP has a bright future, but the competition is getting fierce as the giants enter the market successivly.

VoIP has been growing rapidly in recent years in China. It's estimated that by 2007 VoIP call will amount to 210.11 billion minutes with revenues of RMB 52.53 billion yuan. Low fee is the direct reason that leads to the rapid development of distant IP call. In terms of distant call, 2003 and 2004 saw a growth rate of 5.9% and 26.3% respectively in traditional distant call, 24.4% and 11.4% in mobile phone distant call, 40.7% and 39.0% in distant IP call. VoIP calls account for 46% of total telephone calls, which were 37.2% and 42.2% in 2002 and 2003 respectively.

VoIP is considered to be one of the most potential trends in the Internet field in the coming years. And it may topple down traditional telephone business. VoIP is easy to implement. With broadband access and a broadband telephone worth only several hundred yuan, users can enjoy extremely cheap overseas calls that cost only 0.3-0.6 yuan per minute. Its advantages and prosperous future have attracted huge capitals. Some big consortiums and international Internet giants are going to enter VoIP business. The market scale and development trends of VoIP have become a common focus of attention for various competitors in this area. Under this situation, we produced this report, which analyzes VoIP market scale, service types, growth trends, and growth of VoIP equipment suppliers. This report provides accurate information and scientific materials for telephone companies to discern opportunities and adjust operation strategies under the fierce competition, and for industrial investors to choose their investment strategies wisely

VoIP Market in China, 2005