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Swinburne University of Technology Sarawak Campus

The rise of VoIP technology

August 27, 2014

By Mujahid Tabassum

In today’s market, where Android and Windows systems get people’s utmost attention, communication applications like Skype, Viber, WhatsApp and others have become popular and practical for end users. We are living in a digital world in the sense that our lives are surrounded by a myriad of electronic gadgets which make us also electronically inter-connected with one another in many ways. All of this is possible because of the existence of the Internet. In fact, we can hardly imagine life without the Internet as its ubiquitous presence provides 24-hour connectively. But how many of us really know the technology behind its infrastructure and economic benefits? Not many because our main interest is only to use and enjoy the Internet.

Thanks to advancements in Information Technology its multi-services are very reliable and cost effective. We are able to use communication applications like Viber, WhatsApp and Skype on our mobile phones and electronic gadgets because of VoIP. VoIP stands for Voice over Internet Protocol. It is the backbone of applications such as Skype, Viber, WhatsApp, and so on. In this setup, the telecommunication vendor does not need to set up separate infrastructure and all communication data such as calls and messages are routed over the Internet which makes it a cheaper and cost effective solution. VoIP technology encompasses the full range of services in the traditional telephone system like the interconnection of phones, video conferencing, call transfer and forward, as well as the unified message services. The main advantage of VoIP is that users do not need to pay extra surcharges for calls Short Message Service (SMS) and Multimedia Messaging Service (MMS).

To get the optimum benefits of VoIP technology, users only need to have a high speed Internet connection such as 3G or 4G or Long-Term Evolution (LTE). LTE is commonly marketed as 4G LTE. It is a standard for wireless communication of high-speed data for mobile phones and data terminals. VoIP applications require a minimum data rate between 90 kilobits per second (kbps) to 156 kbps for excellent call clarity. The big challenge for telecommunication companies today is therefore to offer high speed and reliable Internet connection to mobile users. There is indeed an insatiable demand for Internet use in the market.

The use of VoIP technology has become equally significant for home users and businesses. In 2004, a remarkable raise was seen in VoIP market as VoIP technology utilizes existing broadband Internet access to offer its services to end users. According to Ipsos survey, 14 percent of global citizens are currently utilizing VoIP systems. Currently, all large companies are rapidly adopting VoIP services because they help in reducing communication cost. And due to the rapid rising demand of VoIP technology, home users and large enterprises have become two main market sources for Internet Service Providers.

Many surveys have been done to evaluate the growth of VoIP technology and its future prospects. According to Ovum research group, it is predicted that by end of 2020, around US$479 billion worth of revenue would be generated by VoIP technology. According to Infonetics, 2012 was the best year for VoIP vendors because VoIP equipment market grew by nine percent in the fourth quarter as compared to 2011. The reason why VoIP demand has increased is the incorporation of IMS IP (Internet Protocol Multimedia Subsystem) into LTE based wireless networks. This could signal that the revolution in VoIP technology will grow more by end of 2014.

It has been observed that developed countries like America, Australia and Europe have had a significantly huge development and demand for VoIP services. According to an IBISWorld survey, 30 million people are currently using IP telephony services in America and VoIP industry is expecting approximately US$15.4 billion in revenue.

Malaysia is one of the most developed countries in Southeast Asia. Naturally, it has seen a high growth rate in the adoption of VoIP technology for past 10 years. According to a SKMM report, Malaysia generated total revenue of RM79.7 million from VoIP services in 2003 by having only seven ISPs. By 2005, the total revenue reached RM192.7 million. The revenue reached the targeted RM1.4 billion by the end of 2011. The revenue is increasing right now and it is needless to say that it would be still so in time to come.

We can see that in the last 10 years or so, VoIP services have gained tremendous popularity and have also subsequently strengthened their position in the telecommunication industry around the world. Additionally, VoIP market has also seen the entry of Android and Windows gadgets that gave it more boosts. Therefore, it looks like VoIP services on mobile are poised for exponential growth in coming years. The deployment of 4G and LTE networks and future technologies is likely to propel the mobile VoIP into the mainstream of mobile telecommunications in the near future. This would surely help countries boost their economies as well. The forecast is that, by until 2017, one billion people will be using VoIP services over free smart phone applications, according to a Juniper Research release.

In Sarawak, telecommunication infrastructure lags behind that of West Malaysia and the rest of world. So far, only certain areas of certain cities are covered by 4G and LTE services. Improving the telecommunication infrastructure in Sarawak would certainly help the state to generate more revenue and stimulate its economy besides making people more conveniently connected.

Mujahid Tabassum is a lecturer with the Faculty of Engineering, Computing and Science at Swinburne University of Technology Sarawak Campus. He is contactable a mtabassum@swinburne.edu.my