Don't Call--Just Send Me an E-mail: The New Competition for Traditional Telecom
by Barry M. Aarons on 01/27/2003
19 Pages
For years, the telephone was the only means of communication and collaboration over distances. The wire line telephone was a standard utility in every business and every home. And telephone companies were regulated monopolies, with no real competition.
Today things are different. Today there is an abundance of competition in the telecommunications marketplace, and the clear trend is for competition to increase in the future.
Some of this new competition is the result of legislative attempts to infuse competition into the marketplace. Perhaps more important, however, are the new forms of communications competition made possible through recent technological innovation. This paper explores new technologies such as cable and DSL broadband connections, e-mail, instant messaging (IM), and voice over Internet protocol (VoIP) that are competing directly with traditional telecom for communications.
The impact of this new competition is clearly being felt by traditional telecom. In the U.S., the number of main telephone lines (MTLs) is actually shrinking, and is projected to continue to shrink by between ½ percent to 2 percent per year. This reduction in the number of telephone lines is due to new competition from wireless, DSL and cable broadband, and new mediums of communication such as e-mail, instant messaging, and voice over Internet protocol (VoIP) telephony.
E-mail. The most mature of the new technologies, e-mail is used as both a voice call substitute and a postal mail substitute. Particularly for business users, e-mail is often considered far superior to either telephone or even face-to-face communication, because it is asynchronous, and because it can be stored and archived.
Instant messaging. Still considered by some as a communications medium for teenagers, instant messaging (IM) is being implemented as a serious business communications tool. Like e-mail before it, IM has the potential to reshape how workers communicate and share knowledge. And IM tools increasingly cross the boundaries of ISP and medium. Of those who consider themselves professional users of IM, 49% say that it replaces the telephone.
Voice over Internet protocol (VoIP). Businesses have recognized the value of implementing VoIP for several years. But, with the release of Microsoft’s Windows XP operating system, IP telephony is available to typical home consumers, since IP telephony is built right into the Windows XP operating system. An astonishing 15% of online consumers say they use their PCs for telephone calls.
From a public policy standpoint, it is critical that regulators begin to recognize these new forms of telecom competition. The telecom industry has changed in ways not anticipated by the Telecom Act of 1996, and traditional telecom providers are being squeezed by new companies and especially these new technologies that are changing forever the way competition has been viewed in the telecom space.
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