Conventional PSTN traffic will start losing ground to voice-over-IP next year in Brazil, according to an IDC report entitled New Applications in the VoIP World in Brazil. Cost saving is the main driver of this migration, says IDC analyst João Bustamante. One VoIP trial showed a saving of 87% on the average cost of long-distance calls compared with conventional platforms, he notes. Domestic long distance will lose 3% to VoIP in 2003 as the corporate segment adopts the new technology, and global DLD volumes will decline in 2004. In Brazil, VoIP volume is expected to reach 1.6 billion minutes in 2003, or 1% of total long-distance IP traffic worldwide. Volume is set to rise to 20.9bn minutes by 2006, or 4% of the world total. The IDC study predicts that VoIP traffic will total 126bn minutes worldwide in 2003 and 511bn minutes in 2006.
IP technology can save up to 40% for corporate users compared with conventional telephony, says João Bustamante. Companies licensed in Brazil as providers of ?specialized limited services? (Portuguese-language acronym SLE) and ?multimedia communication services? (SCM) will be the main beneficiaries. The corporate segment accounts for more than 60% of total voice traffic carried by conventional platforms, but the IDC analyst notes the following barriers to the adoption of IP technology: the high cost of IP handsets (50-300 US Dollars each); proprietary solutions; and slow technology development. The ILECs aren?t particularly interested in investing in IP because of the heavy capital expenditure required in the last couple of years to achieve regulatory targets. However, gradual migration and the forecast downtrend in conventional telephony, especially in the corporate segment, may encourage investment in future.