IP Telephony costs, from Pulver report (I don't think there is a problem with posting an extract!):
Joe Rinde's Economics of IP Telephony
Joe Rinde is the Director of Switched Network Architecture at MCI. Back
at Fall '97 VON, Joe spoke during the Plenary session where he discussed
the Economics of IP Telephony vs. traditional PSTN. Back at the
"Redeveloping the PSTN/IP Gateway" workshop held in Sophia Antipolis -
Joe promised to make his spreadsheet available.
Joe Rinde <joe.rinde@mci.net> writes:
"Here is a clean spreadsheet for the numbers I presented in Boston.
Looks like I had two mistakes in the original, but neither changed the
basic results. It turned out I used the wrong list price for the gateway
ports. I listed the price as , but actually used . I also found
an error in the calculation of the OC12 cost per bit. The actual amount
was higher than what I used in the presentation results. Both these errors
make the IP cost higher than was presented.
None the less the IP cost still comes in lower than PSTN for the coast to
coast case, by less than one cent per minute.. For the regional case IP
was higher (originally I said they were very close) bust still very close
to the PSTN number (a difference of a quarter cent). So for all practical
purposes there is not difference, as was noted in Boston.
The calculations done for Boston were based on 90ms of voice per packet.
This is very favorable to IP, but introduces latency that may make the
service unacceptable. For that reason I added to the spread sheet
calculations for 30ms of voice per packet. For the coast to coast case it
was still cheaper for IP, but by so little as to not matter. For the
regional case IP got more expensive enough to claim it is more than PSTN.
There may be other errors so I welcome comments from the community on the
numbers and the method used to derive them."
Joe's spreadsheet is downloadable at pulver.com
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March 24, 1998
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