The Killer App: Is It Out There Somewhere? - Company Operations - Brief Article

By Simon Chapman, [email protected]

MIAMI - As a global abundance of bandwidth is generated over the next few years, the price of the resource may fall to the point where it's almost free. Voice-over-IP service providers should anticipate this virtually certain decline by thinking about the kind of business they're in and the kind of business they're going to be in, said some industry leaders at The Phillips Group's CWM 2000 Latin America & Caribbean conference here last week.

According to Steve J. Ott, vice president of global sales for Princeton, N.J.-based ITXC Corp. [ITXC], "The business you're in today may need to change in order to survive tomorrow."

Ott told delegates that traditional markets in Latin America still are growing at a rapid pace and generating substantial revenues. Nevertheless, ITXC expects the traditional phone bill is destined to die. "The traditional business of billing by the minute to the home is not going to exist in that form any more."

Citing the rapid growth of PC and other VoIP applications, Ott suggested that in the future value-added services will be the only way for VoIP service providers to sustain growth as margins from arbitrage - described by Ott as the initial form of IP telephony - decline. But the form these services will take is still anybody's guess. "We don't know what's going to emerge out there as the killer apps that will generate the revenues and make us all successful."

COPYRIGHT 2000 Phillips Publishing International, Inc.
COPYRIGHT 2001 Gale Group