The recent arrival in Germany of a variety of novel residential voice-over-IP (VoIP) services is putting further pressure on Deutsche Telekom's voice business, whose share of the local call market fell by 15 per cent in 2003 due to aggressive discounting by call-by-call (CBC) and carrier preselection (CPS) providers. Although the diverse offerings of 1&1, Freenet.de, roadnet-mediascape and QSC are unlikely to have the same level of impact as CBC and CPS in the short-to-medium term, the German incumbent will face "serious repercussions" if it fails to respond with comparable products, says consultancy Current Analysis. Dustin Kehoe, a senior analyst with the firm, argues that a combination of growing DSL subscriptions and competitively priced and easy-to-use services from VoIP providers will in the longer term force the operator to launch its own residential VoIP offering. A key event is likely to be the October launch of VoIP services by Arcor, which, with a 10 per cent share of voice volumes in Germany, is Deutsche Telekom's nearest rival in the domestic telephony market.
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