Telecom Italia shifts all long-distance traffic to IP network
By Junko Yoshida, EE Times
Oct 16, 2003 (9:03 AM)
URL: commsdesign.com
GENEVA — Of the 25 European telephone operators participating in a study of "converged voice and data," two thirds said that traditional voice services will be less than 50 percent of their revenue by 2006. The study also found the 42 percent of the incumbent operators were planning a swift migration to IP networks within the next two years.
Cisco Systems, which commissioned the Yankee Group study, unveiled the results at ITU Telecom Conference here on Wednesday (Oct. 15). Cisco also trotted out European customers at during a press conference to demonstrate their desire to migrate to a packet-based infrastructure and converged services.
Stefano Pileri, head of Telecom Italia's domestic network, announced, "As of three weeks ago, all the long-distance traffic in Italy is carried over the IP network."
Telecom Italia first began transferring its European carrier-to-carrier traffic to Voice-over-IP in 1999. It then embarked on a project to convert its domestic long-distance traffic to an IP network by substituting switches with 24 IP nodes voice gateways. "We've just completed the task," Pileri said.
In the third phase of its roll out, Telecom Italia said it is now offering Voice-over-IP services to enterprises, he added.
Implementing converged services and infrastructures, however, remains challenging. Pileri said Telecom Italia initially found that "it was not easy to tune quality of service" for different services ranging from voice, data to video conferencing.
The cost of training switch engineers to handle both voice and data has been "enormous," said Peter Moebius, senior vice president and head of Equant, a Swiss overlay carrier. Equant is converging voice and data onto one platform "because it was our only chance to survive," said Moebius.
Asked about spending for building IP networks for domestic long-distance traffic, Telecom Italia's Pileri said it spent 40 million euros (about $46.6 million) in both 2002 and so far in 2003. He estimated a 16 to 18 percent reduction in operating costs this year as a result of the investment. The operational savings will increase to 60 percent in 2004, he said.
The Yankee Group study concluded that despite indications that migration schedules are narrowing, carriers remain skeptical that immediate reliance on converged services alone will stem revenue erosion. Pointing out that operators are judged not on the size of their network but on customer fidelity and value, the report concluded: "If converged services and infrastructures can truly reduce costs, increase loyalty and be a launch pad for new service development, few operators will be able to resist." |
