Priming IP For Voice -- Companies weigh using their private data networks and the Internet for telephony
Gregory Dalton
Data has been hitchhiking on the public telephone system for decades, essentially riding free on a network designed to carry voice traffic. Now the roles may be reversed, as companies start tossing voice cargo onto their private data networks and the public Internet. By the end of 1998, it will be much clearer whether phone calls over the Internet Protocol will remain primarily in the consumer market-or become a serious business option.
This year, technological advances are expected in the two areas-quality and security-that have held back voice transmission over IP. Some companies are already testing Internet telephony and deploying it on a limited basis.
This month, financial services firm Nicholas Applegate will begin testing voice between San Francisco and its San Diego headquarters over its frame relay network and intends to eventually connect to its offices in London and Hong Kong.
"It costs $300,000 [a year] for the hoses for IP overseas," says Scott Turvey, group manager of technical services. "Why pay that and also long distance?" He's watching to see if the bandwidth used by the calls significantly slows down the network-but doesn't think it will because the calls tend to be short conversations between traders.
The U.S. Department of Justice has 10 users involved with a voice-over-IP pilot, says Arun Gurjale, a consultant at the department. Rather than live phone calls, however, the agency is looking at using encrypted voice over IP for wiretaps and for other one-way transmissions, which are less sensitive to the uneven performance and latency still found when voice packets travel across data networks. Eventually, however, Gurjale says the department plans to have agents hold teleconferences over secure IP networks because it optimizes the agency's existing network.
Francois De Repentigny, an analyst at Frost & Sullivan in Mountain View, Calif., projects that overall spending on equipment for Internet telephony will rocket from $1.9 million in 1996 to $1.98 billion in 2001.
Much of the technical progress next year will be in the area of gateways, black boxes that convert voice signals from analog to digital and back. In the first half of the year, Micom Corp., a unit of Canadian equipment maker Northern Telecom Ltd., will introduce its VIP 2.0 gateway, which will support Windows NT for the first time and offer a browser interface and improved features for finding the intended recipient of a voice call along a network. VocalTec Communications Ltd., which pioneered Internet telephony with the introduction of the first client software in 1995, plans to offer a "carrier-class" solution, says CEO Elon Ganor, who declines to elaborate.
Networking vendors are also jumping in. Cisco Systems says it will ship large-scale digital voice packet gateways early in the year. Ascend Communications, Bay Networks, and 3Com also plan to upgrade their products to handle voice.
But as the technology advances, incompatibility becomes a factor. Interoperability has been achieved on the client side with the adoption of the ITU's H.323 standard that was originally developed for videoconferencing. An ITU set of specifications for gateways, known as G.723, may eventually emerge as a standard, but so far it has not generated widespread backing. Some observers say interoperability will emerge in the next six to 18 months.
The foundation for Internet telephony is being strengthened in part by a vibrant, albeit niche, market for residential IP telephony. Tom Evslin, CEO of ITXC Corp., a Princeton, N.J., startup aiming to get into the business of settling payments for phone calls handled by more than one ISP, says less than 1% of international long distance will switch to the Internet next year-but that will still amount to about $1 billion. Domestically, he adds, commercial Internet telephony will have a very limited market made up of extremely price-sensitive callers.
Nobody can guarantee predictability on the Internet backbone today, but Evslin, the founder and former head of AT&T WorldNet, says that might happen on privately managed routes. Officials at Bellcore, the research arm of the Bell companies that is now owned by Science Applications International Corp. in San Diego, say IP telephony will take off on such a network that runs parallel to the public Internet. IDT Corp., an ISP in Hackensack, N.J., is testing IP lines dedicated to telephony that extend to South Korea and Japan.
Other companies reportedly are building IP networks for voice. The idea "seems to run counter to what every telco wants to do, which is to converge their networks" to ease administration and cut costs, says Eric Paulak, an analyst at Gartner Group Inc. He says IP may be useful for voice mail, but is skeptical about real-time voice over IP. "Can we fix every problem?" he asks. "Yes, but there are very large costs that can't necessarily justify the investment" in network infrastructure.
IP telephony in the corporate world may make sense only for those few companies that have their own IP networks. "It's one thing for somebody to say, 'I can slap a product on your LAN that allows you to talk voice across the network,'" says John Parsons, director of strategic telecom planning at Eastman Kodak Co. in Rochester, N.Y. "But it's another thing to build a global voice network and have it work" at a reasonable cost. "We've got a pretty cost-effective, high-quality voice network in the company," he adds, "and we're not prepared at this point to jeopardize it by experimenting."
Adds De Repentigny of Frost & Sullivan, "The main challenge for IP telephony is to move from cheap phone calls to an enhanced communication service. It [has to add] value because we can do more than just voice."
Copyright (c) 1998 CMP Media Inc. |
