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Summary:

As a growth strategy for the telecom industry, focusing investment on mobility and data services while withdrawing it from wireline voice is doomed to fail. People still depend on voice for the vast majority of their communication needs.

As a growth strategy for the telecom industry, focusing investment on mobility and data services while withdrawing it from wireline voice is doomed to fail. The rise of Twitter, Facebook and texting teens does not change the fact that people still depend on voice for the vast majority of their communication needs. And a single phone model for communication makes as much as sense as a single shoe model for footwear.

The future of the telecom industry lies not in mobility or data services but in leveraging voice as the best means of conveying “social energy.” The notion of social energy — aka human connection — was emphasized in John Bowlby’s attachment theory circa 1940 and again in Abraham Maslow’s theory of a hierarchy of needs, from 1943. Bowlby argued that human connection is not optional, while Maslow ranked human connection as No. 3 out of five basic needs motivating human behavior. But while the pursuit of social energy drives the growth of Twitter, Facebook and the as-yet unknown next big thing in communication, it also serves to make even the presently problematic voice industry a multitrillion-dollar global business.

And although President Obama suffers the same mediocre voice quality in conversations with world leaders as teens planning their social agenda do, even a standard telephone call represents the next best thing to being there relative to text or non real-time options. The question is not whether existing uses of the telephone might benefit from voice quality improvements, which, by definition, consist of only those activities one can accomplish in spite of the limitations. The question is whether the implementation of high-definition voice and other changes might make the telephone useful in contexts that presently require getting together in person. Orange’s announced plans to offer HD voice in 2010 as a competitive tool against O2 in the UK will provide an opportunity to put this question to the test.

Indeed, the notion of social energy provides a ready road map for telco innovation. To that end, FWD, where I am CEO, has launched a VoIP trial dubbed Nova which leverages HD (G.722)-capable SIP end points to create the communication equivalent of a web site. Indeed, the declining demand for voice services make clear the need to create more compelling voice offers, but the notion of a telephone company without voice is like a music industry without music.

In-post image courtesy of Flickr user garryknight; thumbnail image of user Don Fulano.

  1. HD Voice is a natural extension as more Voice minutes move over to VOIP services. This is no different than any other media improving upon itself (think HD Radio, Analog to Digital in the terrestrial TV space.

    VOIP ‘s promise the first 10 years was a factor of ‘cost’ …pennies (sometimes free) for voice as opposed to legacy Wireline minutes which cost tenfold and more.

    The next generation of VOIP will be services and convergences (I look at HD Voice as just another service). I expect that within 10 years, our conversations will be translated in real time to whomever is on the other end of the line. Technology innovation just travels faster and faster every day

    http://twitter.com/A_F

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  2. Current approach of placing emphasis on carriers and service providers by some of the proponents of HD Voice is fundamentally flawed. Since the Stupid Network has risen (the fact that the Network was always stupid is different matter), HD Voice can be realized by the end-ponts. There is no need for Nova and the like. It is more useful to encourage consumer electronics industry to build HD Voice enabled end-points and to educate consumers on the tangible benefits of HD Voice. By the way claiming that people will not be physically tired in HD Voice enabled conference calls; people get tired even in a face-to-face meetings. Influence of quality of voice has only second order influence.

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  3. a frend of mine is overseas and he make long calls from “some phone booth” i think they use VOIP otherwise his call would be shorter

    on the other hand. many people don’t know that laptops have mic build in, and there are little that can handle VOIP hardware correctly-here is some good guide:
    Voip/Skype equipement guide

    about HD in voice-hope that mean less interuptions as well

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  4. Aswath,

    The first decade of VoIP answered the Carrier versus No Carrier question. Creativity will remain the domain of startups and entrepreneurs, but the non-carrier VoIP market proved very very small. Why do you think HD VoIP will prove any different?

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  5. VoIP that doesn’t have carrier support is a non-starter in my experience. I tried both Vonage (both router based and softphone) and Skype prior to switching to Time Warner Digital Phone. Both were a disaster in practical use. Vonage would drop calls randomly, voice quality suffered immensely. Aside from a superior voicemail and account feature management system, there wasn’t much to recommend it. Skype barely worked and when it did quality and call reliability was horrendous. I even tried going all cellular with many of the same problems. It wasn’t until switching to carrier provided voip that I was free from these quality/reliability issues.

    Maybe this new HD voip technology can address these traditional problems, but I highly doubt it since they are mostly about QoS, latency, and other issues that an HD scheme would also suffer. Until they manage to get current consumer grade, non-carrier provided voip up to snuff, pushing for HD quality is wasted effort. And much like the affinity for sub-standard quality mp3/aac/streaming vs CD/flac/FM, I suspect that once those base level quality and reliability issues on standard definition voip are taken care of there will be little market demand for HD quality.

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  6. [...] The Fall and Rise of Voice – GigaOM. [...]

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  7. This article is so wrong…
    I have to agree with Aswath. The landscape is changing, we are pretty much committed to all IP now, which definitely makes it easier for endpoints to implement whatever service they want. So what else would they need for HD voice? Low latency? Bandwidth?
    The future is personal, rather than specifically mobile, but voice is just a facet. Any telco that attempts to hold on to their traditional ‘voice’ model (HD or not) is not going to be particularly successful

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  8. Dan: I am not concerned about carrier vs. non-carrier. I am suggesting it should be about individual vs. service providers. If I can directly visit GigaOm without the need to use any proxies, why shouldn’t I directly contact you (or your server due to NAT/FW) after authenticating myself.

    Jeff Pulver’s refrain had been “you can be your own phone company”. But the tech community didn’t rise up to deliver on it. SIP community didn’t develop a user centric ID scheme, even though OpenID is readily available. End-points didn’t evolve to easily use SIP URIs, but clinged on to the traditional telephony user interface, which in essence forced us to continue to use E.164 addressing scheme, which requires outbound proxy. Once we have these two, end-points have freedom to do what they want to do. Then HD Voice will naturally happen IF there is a need for it.

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  9. One should not dismiss HD voice without experiencing HD voice. HD voice is no different than HDTV in a dependence on direct experience to convert people on the merits. A representative HD voice demo is more difficult to accomplish than HDTV as it requires more than passive observation. Use of HD voice matters most where communication matters most with close collaborators and building relationships.

    The carriers can speak for themselves, but it remains my belief most HD voice will get deployed by the incumbent carriers. The self-help prospect of end users implementing HD voice “over the top” using only broadband connections and a HD IP phone exists only for a very small group of tech savvy early adopters. Mass market appeal requires multi-billions of investment in device provisioning infrastructure and marketing to drive awareness.

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  10. This post links to the Author’s $100 “trial market” application? Is this an advertisement disguised as editorial conten?

    BTW, any examples of $100 beta testing applications ever being successful? Has anyone forked over their $100 and can they provide some insight here?

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