The VoIP Revolution Will Not Be Televised

Australian consumers have always been cautious ones. Internet uptake was slow on the upstart and it has taken many years for Australian’s to trust online credit card transactions or online business in general. In the past five years, netbanking has boomed in popularity across the country as Australians look to the future. It’s probably no co-incidence that this has coincided with broadband rollouts in the same time. In 2004-5 ABS statistics reveal that almost a third of all businesses do not use broadband because of perceived unavailability or lack of benefit. The tyranny of distance places extra responsibility on last (hundred) mile technologies and even now much of the POTS (plain old telephone system) lacks adequate quality of service for a stable dial up connection, let alone broadband.

Amidst the preparation for the sale of Australia’s largest telco, the government has decided to throw a decent sum of money into last (hundred) mile solutions for rural Australia in order to increase the bottom line figures for broadband penetration. These include wireless radio and satellite connections, with the latter being available to people regardless of their geographic location, as 2-way satellite allows data up and down without the need for a phone line at all. Those other rural users who can get access to ancient ISDN technologies are only eligible for the 1-way satellite solutions. After the government subsidy that pays for the equipment to connect these backwaters, the user is left with a 256/64k or faster satellite service with some severe limitations.Despite the speeds being equivalent to most city users, whose speeds are equivalent to first generation broadband other countries stopped using years ago, satellite obviously requires that the packets fly through space to get from point A to point B. While some common protocols (HTTP, POP, SMTP) are prioritised this still doesn’t make them realtime. Flying through space takes time. This alone makes all realtime applications like VoIP problematic on such services, in remote areas where VoIP’s full potential would best be realised.

As the Liberals prepare Telstra for privatisation, VoIP is a thorn in the government’s side. Cheap wholesale PSTN lines and 1.2 million Australian residential broadband users have set the stage for widespread VoIP adoption. Telstra’s share price has plummeted to an 8-year low, and like any good investor looking at an immediately bleak forecast, it is time to sell. Telstra’s shareholders are getting jumpy and the government are walking a tightrope between the creation of a new regulated market hitherto unseen by Australian consumers and sucking the potential worth of the sale of its biggest asset to add to the 2007 election war fund, propelling the Prime Minister into a leadership run of historical proportions. This on the backs of consumers who have been used to copping the short straw from the monolithic telco and it’s substandard service levels.

Computer savvy business and users have been using VoIP for years with software and hardware solutions, but the residential VoIP services are not about computers, or pre-select codes. The future of VoIP in Australia lies with the wives and girlfriends, arguably the biggest phone users in any household. The VoIP Choice website believes in this principle and only once the savings of VoIP connections reaches these people will the market grow and provide viable alternatives to the ailing Telstra. Angry computer nerds and clever companies gave Telstra the flick years ago, and there is no reason why Joe Citizen can’t now do the same.

While Telstra laments, Engin’s share price is growing and while the fledgling company bears another year of losses, Ilkka Tales, Engins CEO admits they are only at phase 1 of a 5-part strategy. This foresight is rapidly positioning them as Australia’s leading VoIP provider. It’s a pity the Howard government, with its longevity, and Telstra were not capable of similar long term planning for lacking infrastructure, instead opting for a quick sale, a fast buck, and a superficially good looking budget. Consumers will soon be empowered to overthrow their telecommunications oppressor and save more money than they ever did with piecemeal government tax cuts.

Viva la Revolution.

Dylan O’Donnell (2006)


ABS – 8129.0 – Business Use of Information Technology

ABS – 8146.0 – Household Use of Information Technology, Australia, 2004-05

ABC – Engin fires up telecommunications market, Kayne Edwards