October 4, 2005

Incumbent Telcos Will Fend Off VoIP Attackers

The Battle For Pole Position In Fixed Consumer Telecom Markets Intensifies

This is the second document in the "VoIP In Western Europe" series.

by Lars Godell

with Andrew Parker, Lizet Menke

Executive Summary (This is a document excerpt)

According to the hype, VoIP pure plays like Skype and Vonage are about to both change and take over the telecom industry. While Forrester agrees that the pricing of telecom services will continue to undergo dramatic change in the years to come, we think that pure plays have no chance of dethroning proactive European incumbent telcos from their consumer fixed voice market leadership. Currently, 70% of Europeans don't know about VoIP — and only 1% use it for nearly all their calls from home. Coupled with relatively low broadband take-up, European consumer VoIP adoption will move slowly. VoIP pure plays will fail to survive as independent companies, because they don't offer a truly disruptive and transformational service and they lack the key advantages of the incumbents. Telcos like BT and France Télécom have the chance to keep dominating the future voice markets as long as they continue with their proactive and innovative VoIP response strategies.

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