Asia ripe for VoIP as FMC comes of age

Norwegian IP telephony provider Vyke has highlighted the potential demand for mobile voice over IP (VoIP) services in the Asian market, shifting its focus from a European theatre of operations to the Asia Pacific region.

Speaking to telecoms.com Hans-Arne L’orange, chief executive of Vyke, said the Asian market is ripe for services such as mobile VoIP because of the limited availability of fixed line networks and the lack of competition in the space.

According to L’orange, the highly populated countries of Asia, which have largely adopted universally compatible GSM mobile technology, offer more price sensitive customer groups, representing a large opportunity for low cost long distance calling.

It is this opportunity that Vyke aims to exploit while operators playing in both the fixed and mobile arenas wait for fixed mobile convergence (FMC) to come of age.

Initially the company aims to compete in Asia via its recent £500,000 acquisition of Malaysian internet services provider Genme, which it will use as a platform to launch services in Indonesia and the Philippines. Following this the company has its sights set on India, Pakistan and Vietnam.

At present, L’orange believes that mobile VoIP is of significant interest to the international and long distance communication users focusing on reducing their roaming charges, until the market penetration of dual mode handsets – cellular and wifi – allow VoIP to compete against domestic fixed line and mobile services.

This target market is sizeable. According to a report from industry researcher Budde Communications, around 12 per cent, or $32bn of the world’s voice communications market ($260bn in total) will be VoIP driven by 2009, while VoIP will account for 44 per cent of all active lines in the enterprise market by 2008, according to the Radicati Group.

But industry analyst Ovum notes that FMC has been a hot topic in Asia Pacific for some time, although little progress has been made to date because of significant demand and supply as well as technology inhibitors.

Although, over the last two years many commercial drivers and technological enablers of FMC have strengthened in the Asia Pacific region as operators seek to retain voice market share.

For one, new handsets for FMC are appearing on the market. Nokia is set to be a key driver of this device market, intensively promoting its SIP-enabled E and N series phones in the region “as well as talking up UMA a lot,” according to L’orange.

However, even L’orange admits that once the tier one operators start making significant movements in the VoIP space there will be trouble in the market for companies such as Vyke, unless they have significant market share. At that point his job becomes focused on making Vyke attractive enough to be snapped up.