Consultants See Growth In Internet Telephony

Business fax transmissions, voice-mail messages, and pages -- not real-time voice conversations -- will drive most of the growth in the use of Internet telephony in the next five years, according to a new study by SRI Consulting, Menlo Park, Calif.

"Thanks to the economies of using Internet protocols for these applications, Internet telephony will grow to represent the equivalent of five percent of long distance calling minutes worldwide by 2002," said Ed Christie, director of SRI Consulting's Media Futures Program. "In addition, the total market for Internet telephony, including both services and hardware and software, will grow to $9 billion in the next five years."

The study, "Market Prospects: 1998", also forecasts growth in a number of other new-media markets, including high-speed residential data services, satellite arrays, digital TV services, digital VCRs, Internet on TV services, email, and mobile Internet access.

Although the quality of Internet-based services has been an issue for real-time voice applications, SRI Consulting predicts dramatic improvements in the next few years, according to Christie. But much of the traffic that will move to the Internet will be made up of store and forward applications, such as faxes, voice mail messages, and pages, which are not as sensitive as real-time voice is to the transmission delays that occur in packet-switched networks.

The report notes that most of the market will remain in North America, Europe, and Japan, where data traffic is already heavy and the conversion is easier to justify. In contrast, in many developing countries Internet telephony faces a less friendly reception from regulators because it threatens to undermine a local-exchange carriers' ability to recoup recent network-infrastructure investments.

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