SOUTHNET JOINS RACE TO BRING VOICE-OVER-IP TO MARKET
[All,
Another win for Ascend's MAX 4000/6000 gear
Another Dedicated IP Backbone
Another 5 to 8 cpm model at retail
Another Phone-to-Phone with PC-to-Phone to follow
Another Consortium approach to aggregating ISP and CLEC providers
Another dragon slayer that will give incumbents fits
Another 100 city nationwide rollout in record time (would you believe a month?)
Another goal of 250 cities over time
Another future plans for international service
Enjoy, Frank C.]
August 26, 1998
IP-based voice services could become a serious
competitor to ISDN-based voice services over the next
several years.
Another Internet service provider, SouthNet Telecomm
Services of Atlanta, is launching an IP-based voice
network. This comes on the heels of a similar
announcement by Internet Global Services of Dallas
earlier this month, and only weeks after Sprint [FON] of
Kansas City, Mo., and the AT&T/British Telecom
alliance announced they will develop voice- over-IP
services.
"We are going to deploy a voice-over-IP network
nationwide," says Gerald Escobar, sales and marketing
manager at SouthNet Telecomm Services. "We are
looking to have the service rolled out in 100 cities by
Sept. 30. A few cities are up now. Our long-term goal is
to have the service deployed in 250 U.S. and
international cities by the end of 1999."
However, SouthNet will need help if it is going to reach
its goal of 100 cities by Sept. 30. SouthNet only operates
nine points of presence itself. The company plans to
sign up Internet service providers and competitive local
exchange carriers (CLECs) to resell its service in areas
where it does not operate. SouthNet offers the
voice-over-IP service in Atlanta; Columbus, Ohio; New
York; Northern Virginia; Savannah, Ga.; and
Washington.
"We have less than five partners for the service right
now," Escobar says. "But we have just made the
announcement, so we have to give the service some
time. We are not just looking for domestic partners. We
are looking to partner with ISPs and telcos
internationally."
SouthNet could not reveal which companies it has
formed partnerships with because it has signed
non-disclosure agreements. This is a standard procedure
in contracts in which one company agrees to resell the
telecom services of another business.
"I think that even though SouthNet is a fairly small ISP,
the small guys can make voice-over-IP work," says
Michael Harris, president of Kinetic Strategies, a
consultancy based in Phoenix. "This offer will be of
great interest to other ISPs. The large carriers and
Internet service providers are going to create IP-based
voice services - the announcements of late have made
that clear. The small ISPs and CLECs will have to find a
way to offer IP-based voice if they want to compete.
"Whether SouthNet will be able to put the pen to paper
with these smaller ISPs and carriers, we will have to wait
and see," Harris adds. "But SouthNet has excellent
timing in developing the service. The market is headed in
this direction."
...Will The Long Distance Rates Be Competitive?
SouthNet believes it will be able to attract ISPs and
CLECs to its service because the price is right. The
company would not reveal specific pricing for the
service, but it says carriers and ISPs that resell
voice-over-IP will be able to offer domestic long distance
to the public for between 5 and 8 cents a minute. That
beats the pricing of many domestic long distance plans
offered by large long distance carriers to small
businesses and residences in the United States.
"If you are a big company, you can get [5 to 8 cents a
minute] on standard phone service by bundling long
distance minutes together," Escobar says. "Our service
is for mid-sized businesses and small businesses. They
often do not have large volumes of long distance
minutes, and can't get discounts on their long distance
costs from carriers. Some of our partners are selling the
service to residential customers as well."
"Five to 8 cents a minute should put a lot of ISPs in a
solid position to compete against the AT&Ts and MCIs
[MCIC] of the world," Harris says. "This seems like a
good target price for SouthNet too. It allows SouthNet to
still turn a profit on its service, while giving its
customers a price point they can do some damage with
in the market."
International long distance pricing is likely to be higher
than 5 to 8 cents a minute, but less than the international
long distance pricing of the large interexchange carriers
in the United States. SouthNet is still in the process of
forming parterships with ISPs and carriers outside of the
United States, so SouthNet would not predict what the
pricing for international long distance will look like.
...A Look At The Specs
The quality of IP-based voice services has been a
concern among ISPs and carriers in the past. When
packetized voice calls are transmitted over an IP network
with heavy traffic on it, their packets can be delayed.
This causes pauses in conversations, and can cause
popping or clicking noises on a call.
However, SouthNet is taking measures to eliminate the
possibility of delays occurring on its network. The
company is dedicating an IP backbone to voice traffic
alone, rather than including standard Internet traffic on
the backbone. SouthNet also is promising partners it will
upgrade the voice-over-IP backbone from T-1 lines with
frame relay running over them to T-3 service in network
segments where voice traffic becomes heavy.
SouthNet has chosen an Ascend Communications
[ASND] system to integrate voice onto its frame relay
network. The MultiVoice solution is available on Ascend
MAX switches. SouthNet has approximately 110 MAX
switches deployed in its frame relay network.
"We offer MultiVoice on the MAX 6000 and the MAX
4000," says Jose Garcia, senior product manager at
Ascend. "Our MAX 4000 Access Concentrator has slots
in the back for cards - you can put six cards in them.
There are three MultiVoice [digital signal processor]
cards available for the slots - a 16-port model, and
12-port model and an eight-port model. Each port can
handle one call at a time."
The software on the MAX 6000 can handle up to 48
simultaneous IP voice calls. The MAX 4000 also has six
slots for MultiVoice cards, but the software on the
switch only can maintain 16 simultaneous IP voice calls.
A software package called MultiVoice Access Manager
also is required in the MultiVoice solution. It creates a
gateway for voice- over-IP calls. The functions of the
gateway include authenticating user names and personal
identification numbers, translating phone numbers into
IP addresses and routing voice calls over an IP network.
The price for a MAX 4000 switch equipped with 48 ports
for voice-over-IP service runs $36,000. This includes the
switch, the MultiVoice DSP cards and the voice-over-IP
software for the switch.
SouthNet is using the Ascend voice-over-IP system to
offer phone-to-phone voice calls. Customers dial a
phone number to access an Ascend MAX switch, and
then dial a second phone number to reach their
destination. SouthNet plans to launch a PC-to-phone
voice service in January 1999. (Michael Harris, Kinetic
Strategies, 602/598- 9500; Jeff Lemay, SouthNet
Telecomm Services, 770/937-9550; Jennifer Reidy,
Ascend Communications, 510/747-2761.)
[Copyright 1998, Phillips Publishing]
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