The Coming Measurement Problem

Measuring the size of the voice market is a problem the industry will start to face in greater measure as "telephony" becomes "voice" and "IP communications." The fundamental issue is that as voice and IP communications become embedded in the business models of other applications, it becomes harder to quantify the actual financial and business impact. Up to this point, quanitifying the size of the telephony business has been pretty simple. One has public reports by governemental agencies on the amount of wireline volume and revenue, as well as mobile volume and revenue. You add them up and derive th first order, retail revenues. Then economists can start adding in the full economic impact by applying multipliers.

But what does one do when voice and communications features are a "no incremental cost" sort of item? Voice will arguably be more important in the future, as it is embedded into gaming, documents, collaboration, portals, desktop apps. But it won't be as easy to separate "voice" and "communications" revenues from "multimedia," "entertainment," "enterprise software," "advertising" and other potential revenue streams.

In other words, the killer app of the communications industry remains "communications". But the ways communication gets monetized are changing. And that's going to make harder the task of figuring out where we are, since much of the value and revenue generated by communications features will not be generated in ways that allow easy disection of volume. Sometimes a "killer app" is offered on a "no incremental cost" basis. This is one way email might be considered the killer app to drive Internet access. It doesn't cost the user anything beyond the basic subscription, but the value of the app initially is high enough to drive the access business.

In a similar way, the value of a BlackBerry or smart phone device might be driven by the ability to use email on a mobile device, even if there is no incremental charge for the messages themselves. In the developing context, one adds VoIP and then entertainment video as contributing "killer apps" for broadband access service. Sure, broadband becomes important first as a way of avoiding the "World Wide Wait," not because there are new apps possible only with broadband. But then those apps are discovered by end users. Things such as VoIP and streaming media, telepresence and rich media in general.

All of which is going to make measurement of adoption, revenues and impact much more challenging.