Dispelling Four Common Myths of SIP-Based Consumer Services

By: Steve Brock, Sr. Manager Multimedia Communications Marketing, Nortel Networks.

Recent market research indicates that previous assumptions regarding the value of SIP-based communication services to consumers may not be accurate. Nortel Networks and Pollara, Inc. have just recently completed a detailed study of the U.S. Broadband User market - research that dispels some of the consumer communications "myths" that have developed.

Let's take a look at a few examples of these "myths" that do not seem to be supported by research:

Myth #1: Consumers have all of the communication services they need.

This is absolutely false.

The new market research reveals that consumers continue to feel "out of control of their communications" -- over 70% of broadband consumers are annoyed by unwanted telephone calls, and over one-third say that they dislike having to dial long telephone numbers. This opens the door for new SIP-based services such as "call screening and routing" which allows users to set up rules to determine which incoming calls get through and direct these calls to the appropriate device(s) - and may include signaling all devices at once. In addition, the North American numbering plan is not getting any shorter, so new services such as "click-to-call" from a PC or PDA and "call logging" have substantial value to consumers. In fact, a significant number of broadband consumers will pay between $2 and $8 per month for several of the new communications services included in the research!

Myth #2: Consumers will not pay for new Internet communications services because they are already available for "free" on the Internet.

There are actually 2 myths here - the first is that all new communications services that consumers value are available today on the Internet. This is absolutely not true. The average internet user would be hard-pressed to locate services such as "one-voice mailbox", "call screening and routing", and "multi-party video conferencing" on the Internet - much less to find these services for free!

The fact is that there are a number of new services that consumers want that are not yet widely available. This new research indicates that over half of all broadband users would pay for a bundle of these new internet-based communication services, and over 20% would pay between $17 and $20 per month for the right services bundle (on top of their existing broadband service cost).

As far as the services that are already available for "free" on the Internet, such as PC video and file transfer (howbeit with limitations), the research concludes that consumers will pay for these services, especially the video calling (see myth #3), if they are offered in a more convenient way.

Myth #3: Consumers are not interested in video calling.

One of the more surprising results of this new research is that PC-based video calling was actually the highest valued service of the services included in the research among broadband home office workers, and the third-highest among all broadband users. This ranking is based on how much consumers would actually pay for each service. The research indicates that broadband home office users would pay as much as $8 a month for a quality PC-based video calling service. PC-based video calling is especially attractive to geographically distributed families (15% of broadband users communicate with international friends and family on a regular basis) and to families with young children. The research indicates that PC-based video calling can serve to connect these families together with long-distance family members and friends.

Myth #4: Wireless phones have solved the problem of missing important phone calls.

Contrary to popular belief, the market research indicates that broadband users with wireless phones are actually twice as likely to miss important calls as their counterparts without wireless phones! The complexity of managing communications across multiple devices seems to negate the increased availability provided by wireless devices. These same consumers say they are willing to pay for a service that addresses this communications management problem! New SIP-based web services can be offered to provide the means for users to organize all of their devices such that they function as one communications solution (one number, one mailbox, etc.). The research indicates that almost half of all broadband consumers would pay for this type of service, and almost 20% would pay between $14 and $17 per month to solve this problem!

A New World of Consumer Services Opportunities!

This research provides strong evidence that consumer communications services revenue growth is not dead! On, the contrary, the power of the Internet has given birth to a world of new communications services - services which fill the current communications gaps of consumers, and thus services that consumers will pay for!

Nortel Networks has added a new white paper to the SIP Center entitled "Next-Generation Broadband Voice Services: What Broadband Consumers Want and Are Willing to Pay For" which provides more details about the consumer research included in this article. Also, Nortel Networks will be demonstrating the SIP-based consumer services discussed in this article in their booth at the SCTE Cable Tech Expo show in Philadelphia, Pennsylvania from May 12-14!