Rotary Telephone

The Telephone Network As Profit

In an interesting piece on Ars Technica discusses how the traditional telephone network is becoming obsolete and how we should get ready for the “All-IP Telco”. This type of change is part of bringing the old phone systems into new infrastructure. Jon Brodkin goes on to interview Daniel Berninger:

“We have 100 years of traditional telecom playing out, colliding with 50 or 60 years of information technology, and the thing that comes out of that collision is an all-IP telco,” Berninger said. “In five years we’ll know what that looks like. At this point we can just guess. But it’s going to be a very big deal.”

This is significant for traditional networks, but we’ve seen wireless companies switch to all IP in the past. what is significant, and perhaps unprecedented, is that all telcos that are doing this are probably still going to charge customers the same (or more) money and continue to split these services from data offerings as a marketing practice. As customers walk away from landlines, they’re walking into a telco that has already placed its voice infrastructure on IP networks.

In other words, the infrastructure to support voice calls will be completely paid off for the telco and, after this switch, start becoming pure profit for them. Clever companies will include voice calls in already crazy data usage charges. The fact that the Internet (and IP networks) are largely unregulated should help telcos reap huge profits.