tailieunhanh - VOIP services creating an emerging competitive environment

This paper introduces an economic model to explain the relationship between traditional telephony services and VOIP services. In particular, we show that low income families have not benefited from VOIP services and VOIP could be a substitute for long-distance calls but complementary to local services. | RESEARCHES & DISCUSSIONS Voice Over Internet Protocol (VOIP) providers is generating the game of telecommunication market. Based on the available advanced technologies and smart soft-wares, new entrants can reduce initial investment and production costs to compete with incumbent local exchange carriers (ILECs), which dominate the telecommunication market for a long time due to economy of scale and scope. This paper introduces an economic model to explain the relationship between traditional telephony services and VOIP services. In particular, we show that (1) low income families have not benefited from VOIP services; and (2) VOIP could be a substitute for long-distance calls but complementary to local services. Specifically, we implement an empirical analysis of bundling telecommunications services that are carried out with pooled cross sectional time-series data for all states of the United States of America in the period 1995-2006. Finally, we offer a brief overview on current situation of VOIP services in Vietnam. Keywords: competition, complement, substitution, telecom, VOIP. 1. Introduction 52 The bundling game between Telecommunication companies (Telcos) and Cable TV is creating a new convergent trend called triple play including TV, broadband network and telephony. This is leading to a new dynamic competitive environment in digital communications. The traditional service providers are now playing two main roles as incumbents as well as rivals. In other words, the giant incumbents in telecom industry are striving to increase the cable television market share where cable TV companies have dominated the market for a long time. Meanwhile, cable TV companies have also developed new technologies to implement bundling triple play services and become stronger competitors in telecom services. Otherwise, by using the available advanced technologies based on the global network, many new service providers could enter the market and compete with the incumbents in .