Telcos are leaving revenues on the shelf through their refusal to offer quality voice services, according to contrarian academic Professor Andrew Odlyzko.

The University of Minnesota Digital Technology Centre director told PTC’09 this week that while voice traffic volumes were still growing “in terms of value, it is a different story.”

“There are opportunities for higher quality voice,” he said. “We talk about the aurality of human culture, a reason why video telephony hasn’t taken off.”

“But toll quality voice is lousy quality, especially for women’s voices. Wireless voice is horrible… it has been selected to be the lowest quality one can have that people wouldn’t reject.”

Service providers wondering how to get more value from voice telephony should consider creating higher-quality premium-priced services, he suggested.

He said that one of the attractive attributes of Skype was that with a good broadband connection, good speakers and a good microphone, the quality of calls was better than “toll-quality” connections.

Toll and wireless-quality voice today was like “going to a restaurant and being handed a dirty glass. That’s how I feel telcos treat voice today.”

Odlyzko said that the move to 3G wireless services had presented an opportunity for better voice quality but operators had been “deluded by the Internet” and instead, focused on data.

However, Odlyzko also used wireless data as an example of how providers could create more value. Although wireless data probably only accounted for around 1% of all data flows currently, it commanded a price premium that saw it generate considerably higher value for providers.

Odlyzko also stuck his contrarian claws into a few more industry mantras. He rejected the idea that video would account for 90% of Internet use, suggesting that this ignored the rise of backups, software updates, imaging and sensor applications. But he also suggested that there was too much hype about cloud computing, pointing to the notion that developments in transmission capabilities lagged behind those of storage and processing power. “Unless something happens in transmission, most of the information will remain at the edges and not in the cloud.”

Meanwhile, his co-panelist, Microsoft network strategist Brian Swenson, offered an interesting insight into how that software powerhouse is adapting itself to the online world. Swenson said that Microsoft now had about 180 online applications including Hotmail and Messenger and usage was increasing at about 100% a year, almost double the global Internet average. “Microsoft’s online network volumes have been increasing by 75% CAGR since 2001,” he said, although some services such as Hotmail—which has 500m users—were growing more slowly because they had reached saturation point.

The two panelists disagreed on the prospects for video communications, however. Swanson said that in today’s climate, there will be less “flying and more telepresence.” But Odlyzko said two centuries of history showed that improved communications and transportation usage tend to grow “hand-in-hand.”

Grahame Lynch