OECD: Broadband internet to reshape entire communication sector

As Google’s much-awaited Google Talk application hits the market, a new OECD study predicts stiff competition for traditional fixed-line telephony from internet-based solutions.

The OECD’s 2005 Communication Outlook comes just as traditional telephony carriers are recovering from a period of non-profitability, but, the authors say, they may soon be plunging back into the red. The main threat comes from Voice over Internet Protocol (VoIP) telephony, which poses a series of challenges – especially to the profitable market in long-distance foreign calls. Using programmes such as the popular Skype VoIP application, users can cut 80% of their phone costs. 

More threats for fixed line telephony arise from the growing popularity of mobile services, which is likely to be boosted once third generation mobile telephony with its high bandwidths and abundance of new services becomes widely deployed. But 3G itself is being challenged by the spread of wireless internet hotspots, which, in combination with VoIP may also be used for telephony. 

The next threat, according to the OECD, arises for free-to-air TV, which may gradually be replaced by video downloading and video-on-demand on the internet. Cross-platform competition between the different technologies involved may create a need for new regulatory approaches, the OECD concludes. 

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