Voice-over IP Part 1: IP turns the corner

6 Apr 2004

Voice-over IP is one of those technologies whose time always seems to have been just around the corner. The logic behind the technology is compelling. Given that voice sent down a copper telephone line is just a piece of data just like any other electronic message, why not send it over the same network as your data?

The ubiquity of IP (Internet Protocol) the standard used for sending and receiving data on the internet, makes it a logical choice as the transport system. IP is also a packet switched technology i.e. the message is broken down into smaller ‘packets’ of data which are sent individually over the network, before being reassembled in the correct order at the recipient’s end. This has been happening transparently with email and other communications for many years. The issue of using voice is that unlike email, which can arrive some minutes after it is sent, voice needs to arrive instantaneously.

While this presents a challenge for network design, the payoff is worth it. Unlike a traditional PSTN system which is circuit switched, requiring a whole circuit to be open for the duration of a call, IP telephony makes much more efficient use of the network. John Chambers, Chief Executive of networking giant Cisco has even gone as far as saying that voice calls will eventually become free, provided as part of the bundle when a company signs up for data services.

Services such as Eircom’s Business IP Network and Esat BT’s MPLS services allow companies to extend their WAN over the telco’s network for an end to end IP connection. The benefit of this is that more voice can be send over the same amount of bandwidth: a traditional voice call needs 64kbit/sec of bandwidth but by applying compression to an IP stream this can be reduced to as little as 8kbit/sec without impacting the quality of the call.

In addition, voice and other applications can be much more easily integrated to drive business efficiencies. Sean Loughman, Head of Innovation at Eircom, points out that because MPLS networks can prioritise different types of traffic they are ideal for time crucial applications such as voice and video.

Despite the fact that convergence means large enterprises can combine the teams supporting voice and data internally, system integrators with a voice speciality will still have a role to play. According to Stefan Callery, Business Development Manager with 3Com, it puts all its voice over IP business through authorised voice resellers, which have specific experience of installing these type of networks.

Hardware vendors in this space broadly fall into two camps – data networking companies producing pure IP systems and traditional PBX voice players who offer a migration path through hybrid IP/PBX systems. Given Siemens’ pedigree in the telephony space, it’s no surprise that Enterprise Business Manager Gary O’Callaghan says that the successful VoIP vendors will have to have a voice pedigree. “Voice is real time, unlike data,” he explains. “People have much higher expectations of voice than data – features like call forwarding and pickup are taken for granted. The current voice players will be the strongest players in the converged world.”

It’s not surprising that Mike Galvin, Country Manager for Cisco, the networking company that has won most market share from the traditional PBX players, holds a diametrically opposed view. “We know IP better than any company on the planet – it’s what we are really good at,” he says. “If convergence is on IP then we have a unique position.”

Considering that the technology enables toll bypass for companies with a number of sites, by channelling voice over data networks that are already in place, it would be logical to assume voice over IP puts the hardware manufacturers in competition with telcos. Not so, according to the experts. “Ireland is so competitive for voice with cheap business rates from the carriers, that it’s just not as compelling a driver as in other markets,” says Barry Moylan, Sales and Marketing Director with Allnet, a Cable and Wireless subsidiary that has extensive experience of carrying out VoIP installations for customers.

Mike Galvin also believes that hardware companies can continue to complement the telcos rather than compete for their revenues. “Voice will get cheaper for ever and ever because the cost of access will be reduced – which is why the carriers are moving quickly to IP,” he says. “Reduced costs for carrier means they can provide cheaper costs to consumers.” Cisco’s vision is to provide the technology to carriers to enable them to provide new ‘value-add’ services that will offset the revenue lost from voice becoming a commodity.

Cisco is providing much of the technology that will allow Esat BT to launch a hosted IP telephony service next month. According to Emer Kennedy, Head of Global Products with Esat BT, a hosted service means IT managers aren’t concerned with maintenance or housekeeping tasks such as adds, moves and changes. While companies with a number of sites will enjoy savings on ‘on-network’ calls, Kennedy believes the real benefit comes from the business applications VoIP enables rather than merely being another mechanism for transporting voice. She highlights the many software companies that are part of Cisco’s AVIDD program, whose applications will be available to customers of the new service. Although Eircom has not revealed plans for a similar service, Loughman says we can expect one “quite soon”.

So does all this activity mean that the days of circuit switched phone networks are numbered? “It’s evolving towards all-IP – the question in the industry is how fast that’s going to happen. Some people say it will happen tomorrow, others says it could be in ten to 15 years. I think we’ll still have circuit switched networks for some time – the technology has been evolving for over 100 years and it offers 99.99% reliability.”

By John Collins