As a communications technology, the power of a system like VoIP is compounded by the number of people who use it. This phenomenal is called “network effects” and we see it in play around us every day. Take Facebook for example. Its greatest value is not the site design, nor the site features. Rather, the power of Facebook comes from the fact that it has the largest number of users. So if you want to communicate with someone on a social network, Facebook is the most logical choice all things considered. Such is the power of network effects. For systems like VoIP, network effects involve being able to communicate with other people using the same technology. If a large chunk of users becomes inaccessible to you, the inherent value of the service decreases.
So far VoIP penetration in the US has lagged behind that of other countries in the EU. Perhaps because of this, telecom carriers and ISPs in the US have not needed to try and take serious measures to curb the growth of VoIP services that can threaten their traditional income streams. Such is not the case in countries outside the US however. We have repeatedly seen that nations in the European Union are not exactly in favor of net neutrality. Many ISPs throttle or block VoIP services entirely and some of them have even toyed with the idea of charging extra for VoIP traffic to preserve the income streams that they traditionally receive from land lines and wireless contracts. A few nations however take the extreme step of banning all VoIP technology outright. Ethiopia is the latest example.
What happens when all the users of VoIP from a particular country lose their ability to take advantage of the Internet for voice communications? It means that any businesses that have offices in those particular countries have lost the value of the VoIP systems that they may have installed over there. If it’s an important country for their operations, VoIP as a whole loses its value. In other words, network effects decrease.
If you think that Ethiopia is a negligible country in terms of importance to the VoIP world, consider that other nations while not having banned all VoIP technologies, have significantly crippled the power of VoIP within their borders. India for example houses 1/6th of the world’s population and doesn’t allow VoIP gateways within its borders from servicing telephone numbers that originate within the country.
As long as policies like this continue, the technological benefits of VoIP will be restricted only to those developed countries that are not afraid of new and innovative services. This issue is closely tied up with the matter of Internet neutrality. The next few years are going to be very interesting to see how nationstates around the world respond to a changing environment and whether or not they will embrace new technologies like VoIP as a replacement for the old.