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The diffusion of VoIP (voice over internet protocol) fosters the process toward the info-communication industry

The diffusion of VoIP (voice over internet protocol) fosters the process toward the info-communication industry. CECERE Grazia Phd student in economics Dime workshop « Distributed networks and the knowledge and the knowledge -based economy  » 2007

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The diffusion of VoIP (voice over internet protocol) fosters the process toward the info-communication industry

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  1. The diffusion of VoIP (voice over internet protocol) fosters the process toward the info-communication 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

  2. Outline • Technical characteristics of VoIP-modularity • Analysis of VoIP economical characteristics, such as indivisible, fungible, cumulative and complementary in respect to internet protocol. • Layer model • Telecommunication industry toward the info-communication industry knowledge dynamics. • Two main models of VoIP application and the criteria for distinguished them.

  3. 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-to-Talk, Vonage, FastWeb -1999 and 2001 • “VoIP software- service” allows communication PC-to-PC, 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)

  4. Objective • The article shows how the VoIP technology is transforming the telecommunication industry into the info-communication 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

  5. 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)

  6. 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)

  7. Knowledge dynamics

  8. Layer method: static and dynamic analysis Fransman (2002b), Fransman Krafft, (2002) avec actualisation de l’auteur

  9. Inter and intra layer convergence

  10. 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

  11. Open innovation system Low barriers to entry many innovations Based on general purpose technology Innovation incentive – new technologies and applications Rapid, concurrent, innovation Closed innovation system High barriers to entry Few innovations Fragmented Knowledge based Medium-powered incentives Slow, sequential, innovation Info-communication industry vs. old telecommunication industry Fransman (2003)

  12. Criteria for categorizing IP network voice service and Voice software-service

  13. 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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