Transcript Document

The diffusion of VoIP (voice over
internet protocol) fosters the
process toward the infocommunication industry
CECERE Grazia
Phd student in economics
Dime workshop « Distributed networks and the knowledge and the
knowledge -based economy » 2007
Université Paris Sud 11, Laboratoire ADIS, France
Joint Supervision University of Torino, Italy
Visiting Student University of Sussex, SPRU, United Kingdom
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Outline
1. Technical characteristics of VoIP-modularity
2. Analysis of VoIP economical characteristics,
such as indivisible, fungible, cumulative and
complementary in respect to internet
protocol.
3. Layer model
4. Telecommunication industry toward the infocommunication
industry
knowledge
dynamics.
5. Two main models of VoIP application and the
criteria for distinguished them.
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Two main applications
•IP network Voice service” providers are Internet
Service Providers (ISP), technology applied to the
broadband networks; they offer free calls and other
bundling services, examples are Iliad/ Free, Talk-toTalk, Vonage, FastWeb -1999 and 2001
•“VoIP software- service” allows communication PC-toPC, thus the communication is made thanks to free
software downloading, such as Skype, Yahoo voice
messenger - 2002 and 2003
Incumbents have applied the technology only for
enforcing the backbone- no new offers for consumers
(less competitive)
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Objective
• The article shows how the VoIP
technology
is
transforming
the
telecommunication industry into the infocommunication industry. How these
generate knowledge dynamics into the
industry as it became IP based and how
these changes generate welfare for the
consumers.
• Evolutionary approach and knowledge
economy
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1. Technical analysis
• Distinction among packet switching
technology and circuit switching
(traditional public switched network-PSTN)
• VoIP reduces the cost of communication
VoIP could be considered as a module
modularity- (Baldwin Clark, 1997;
Steinmuller, 2005)
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Economics characteristics of VoIP
VoIP is coming from a “general purpose
technology” (Bresnahan, Trajtenberg, 1995;
Verspagen, 2007) the internet protocol. For
this reason, I assume that it has the same
characteristics of knowledge: indivisibility,
cumulative, fungible and competitiveness.
(Scotchmer, 2005, Antonelli, 2005)
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Knowledge dynamics
Technological
convergence
(telecommunication/internet)
Convergence of
Services/applications
(voice+ value added
services)
VoIP
software
Cumulative and
indivisibility
(voice send on the
internet network)
Fungible
(more internet based
applications are possible
IP network
voice
providers
Cumulative and
indivisibility
(applied to the TCP/IP
network)
Competitiveness
(the merger/combination
of voice and value added
services)
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Layer method: static and dynamic analysis
Layer Activity
Firms
V
Application layer and content
diffusion/production
Ebay, iTunes, Myspace,
VirginMega
IV
Navigation (browsers engines,
electronic payment security)
Google, Yahoo
III
End-to-end connectivity (email, VoIP)
Skype, PayPal (ISP-internet
service providers et ASPservice acces providers)
II
Network transmission (optical fibre,
ADSL, cable, wireless -Wifi, Wimax)
Incumbents and new
entrants on the network
building
I
Equipments and software (transmission
equipments, switches)
Alcatel/Lucent, Cisco, Nortel
Fransman (2002b), Fransman Krafft, (2002) avec actualisation de l’auteur
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Inter and intra layer convergence
Firms
Former layer
Layers occupied today
Yahoo
Google
IV –navigation
middleware
IV – search engines
III – VoIP and email service
V - Information, translation
Skype
V- kazaa inventors
(music downloading)
II – wireless service
III- VoIP
IV- games, number telephone
searching
Iliad/
Free
II – internet providers
and network
II- physical and wireless internet
connections
III- email service
IV- search engines
V – video diffusion
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Some economics evidences
• Explanation into the resource
based view (Penrose, 1959)
• Creation of economy of scale and
scope (Davies , 1996, Maeda al.
2006)
• Vertical integration of production
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Info-communication industry vs.
old telecommunication industry
• Open innovation system
• Low barriers to entry
many innovations
• Based on general
purpose technology
• Innovation incentive –
new technologies and
applications
• Rapid, concurrent,
innovation
Fransman (2003)
•
•
•
•
Closed innovation system
High barriers to entry
Few innovations
Fragmented Knowledge
based
• Medium-powered
incentives
• Slow, sequential,
innovation
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Criteria for categorizing IP network voice
service and Voice software-service
Network layer Providers’
(layer 2)
Capabilities
Multimedia
options
Cost of
communicati
on
Consumers
VoIP
perceptions
IP network voice Voice softwareservice
service
Internet
service
providers
Connectivity
layer
capabilities
Bundle
triple play
service
(video)
Subscription
fees
(unlimited
calls)
No different
perceptions
Exploit the
bandwidth
of internet
network
Navigation &
middleware
layer and the
application
Video
conferencin
g, sending
file
PC-to-PC
:free
PC-to-phone:
extremely
cheap
Consumers
Download
the software
and use
handset for
communication
layers
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Conclusions
• The Knowledge dynamics has been a
vehicle of welfare for consumers
• Policy implication, VoIP diffusion fosters
the widespread of broadband internet
connection
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