Don't panic over VoIP says Moody's

Moody’s Investors Service says Voice over IP (VoIP) technology poses little or no risk to European telephone companies, in its latest report on the telecoms industry.

The firm predicts that while VoIP services will erode telecom revenues, the effect will be minimal and, thankfully, gradual, allowing telcos to offset the losses with gains in broadband and mobile phone services.

“The percentage of traffic which will be on Voice over IP is going to be marginal, meaning somewhere between 5-10 percent in 2010,” said Carlos Winzer, author of the report. “For an integrated operator, the upside of wireless plus the contribution of broadband overall will compensate for the marginal threat of Voice over IP.”

The report went on to argue that because most incumbents have healthy bank accounts and strong balance sheets they should be able to withstand pressure on revenues and margins in the short term.