Metaswitch: Lots of innovation left in voice

ORLANDO – While recognizing the troubling decline of voice access lines at most operators, Metaswitch CEO Kevin DeNuccio told attendees at the Metaswitch Forum here that innovation in areas like voice-over-IP and session initiation protocol networking means reports of the voice industry’s death are greatly exaggerated.

Noting that telecom spending is now outpacing GDP spending in most areas of the world (citing Gartner Group numbers), DeNuccio said, “The numbers say everything is good, but everyone is writing about our death,” noting that, in particular, common wisdom says that “the Internet has killed the phone business.”

The challenge, DeNuccio said, is that changes such as social networking and increased use of mobile devices have dramatically altered the communications landscape – and affected how service providers do business. He noted that 20% of residences today don’t have an access line in the home, a trend that is only continuing.

“Most of the revenue today does get paid by the phone call,” DeNuccio told the forum audience of almost 800 service providers. “So it does have a dramatic impact on what you build your business around. The question is: What are the dynamics of change, and how fast is it going to happen? You have to ask, ‘Do I really have a shot in this industry. What do you really do from here?’”

To provide some additional insight into the challenges facing the industry, DeNuccio presented the results of some Metaswitch polling of its customer base – in particular around the questions of competition and how to respond.

According to the service providers surveyed, the largest threat to their businesses (at 56% of respondents) is telecom regulators – a threat that DeNuccio admitted but also said the industry “can’t control.” The next biggest threats were viewed as cable competitors (44%), Google (28%), CLECs (24%) and Apple (5%).

In response to those challenges, DeNuccio said service providers must look to business model and service innovation. The future, he said, is “not going to be about minutes and messages. It’s really going to be a new business,