The Voice over IP telephony industry risks a regulatory clampdown if service providers continue to avoid participating in the Telecommunications Industry Ombudsman scheme.
Tear-away growth in the broadband phone service provider industry, where unstable start-ups can appear and disappear within a month is destined to hurt consumers and the industry if service providers continue to shun the regulatory requirement of belonging to the TIO scheme.
Market Clarity’s founder and CEO, Shara Evans, said a recent survey carried out by her research company revealed that a shocking 60.4 percent of VoIP providers are not members of the TIO scheme.
This compares with 86 percent of PSTN providers and 84.4 percent of mobile network service providers.
“The fast growth of the VoIP market poses a challenge for regulators. The legislation was written pre-VoIP and the definitions for a standard telephony service are a little outdated,” said Evans.
VoIP service providers might think that this allows them to avoid registration and when combined with the challenge of tacking the appearance and disappearance of service providers from the VoIP landscape, it is hard for the TIO to maintain a list of who should be a member.
“The thing is that the average consumer doesn’t understand the system until its too late,” points out Evans.
It’s also difficult to determine why these providers disappear, although Evans suggests that running a pure-play service provider business is difficult without a large user-base. For this reason, bundled service offerings are becoming more popular said, she said.
“In 12 months it will be uncommon to find an ISP that doesn’t have a telephony offering – whether that’s bundled PSTN or VoIP or mobile. It’s more cost-effective to bundle and builds customer loyalty,” she said.
The Market Clarity research revealed that 37 percent of companies offering regular PSTN services are also ISPs.
“The growing number of ISPs offering voice services suggests that the industry is looking beyond its traditional base of Internet utility services, and is looking to reduce churn by commanding more of their customers’ telecommunications spending,” said Evans.
One area not fully exploited by ISPs is mobile phone services. The study found that of 245 providers, 64 offer mobile services and there is a relatively low overlap between mobile services and VoIP services, explained Evans.
The 42-page report titled “ISPs: The New Vanguard of Retail Voice Services” analyses the activities, services and regulatory status of 245 companies offering voice services in Australia and costs $995 (ex-GST)