Rosy Forecasts For IP Telephony At Toronto Conference
October 15, 1998 TORONTO, ONTARIO, CANADA, Newsbytes
via NewsEdge Corporation : Internet Protocol
(IP) telephony is likely to lose some of its
cost advantage over the coming years, but
will continue to have an economical edge
over conventional telephony, and that will
lead to its rapid growth as Internet access
reaches more and more homes, said speakers
in the opening panel of The Canadian
Institute's IP Telephony and Voice/Data
Convergence conference this morning.
"I see a lot of you are from the phone
companies," panel moderator and principal of
T.M. Denton Associates Tim Denton said in
opening the session, "and we have bad news
for you today."
Robert Quance, vice-president of market
development and new products at UUNet
Canada, said data traffic is growing much
faster than voice and will eventually
thoroughly eclipse voice-traffic volumes. It
makes no sense to build parallel networks to
carry voice and data, he said -- "we don't
build two road systems, we build one road
system and trucks and cars can travel on
that road system." One network, designed
primarily for data because data will account
for the vast bulk of the traffic, will carry
both voice and data in future, Quance said.
Steve Guitan, vice-president of
telecommunications and multimedia at the
Canadian Cable Television Association
(CCTA), said IP telephony currently enjoys a
significant cost advantage over the public
switched telephone network in the United
States, because IP telephony providers need
not pay contributions to local phone
companies to support local service. In
Canada, he noted, that advantage is
lessened because commercial IP telephony
operations are treated like other
long-distance phone companies and pay
contributions. Guitan went on to
acknowledge that this advantage will fade
away even in the US, if not through a
change in rules the Federal Communications
Commission (FCC) is already considering,
then because of a general trend to lessen all
long-distance providers' contributions to the
cost of local phone service.
However, Guitan said, IP telephony will still
have an advantage over the switched phone
network, amounting to perhaps one or two
cents a minute. Bill St. Arnaud, director of
network projects for the Canadian Advanced
Network for Research, Industry, and
Education (CANARIE), said the advantage will
be greater - - in fact, St. Arnaud said that
as the volume of data traffic eclipses voice,
"data will be the economic driver of your
future business case, and soon telephony is
going to be free."
Whatever the exact cost advantage is,
Quance said, "ultimately people find ways to
make the low-cost solution work." All the
speakers agreed that IP telephony will grow.
Guitan cited research figures, including
International Data Corp.'s projection that it
will account for about 11 percent of all
long-distance minutes in 2002, and Jupiter
Communications' forecast that IP telephony
will exceed three percent of toll revenues by
that same year.
Guitan also said the cable-television industry
is very interested in using IP to deliver
telephone service over its network. St.
Arnaud said this and other developments will
lead to true competition in telephone service,
noting that cable companies will be able to
bypass virtually every element of the public
switched telephone network, the only
exception being gateways into that network
needed to transfer calls there. |
