Thanks, Steve G.,
Finally got to read it and found it quite entertaining and interesting.
The following article supports several of the points I've been making about the dominant (and emerging, larger) carriers' future roles in this sector:
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March 27, 1998
The voice-over-Internet Protocol market is booming and
making enough noise to get carriers to invest in
equipment and provisioning services. And though
telecommunications service providers are usually slow
to change, hardware vendors continue to aggressively
hawk IP telephony products in efforts to make the market
easier to break into. After the dust settles, consumers
may be reaping the benefits with supercheap rates.
"The big change in the IP telephony market is
mainstream telephone carriers have recognized its
threat," says Christopher Mines, director of people and
technology strategies at Forrester Research Inc.
(www.forrester.com). "Our money used to be on the
Internet service providers to lead the charge, but now it's
on the carriers."
The rapid maturation of the technology made
deployments by big carriers such as AT&T Corp.
(www.att.com) possible. But incumbent carriers will have
to figure out how to brand and price the new Internet
telephony services since they'll have to compete with
their core voice offerings. Mines says the market is
changing current business models. "Do you call it
Internet telephony or supercheap long-distance?" he
asks.
Carriers, such as ICG Communications Inc., IDT Corp.
and Qwest Communications International Inc., with less
to lose can spend their marketing and network resources
on the IP services.
Of course, provisioning new IP voice services means
buying the right equipment. There is a huge array of
choices. Most recent announcements consist of IP
gateways to connect IP networks to the public voice
network.
When it comes to gateways, there are stand-alone
models and IP gateway modules that fit into carrier
switches. Gateway vendor Hypercom Corp.
(www.hypercom.com) recently announced its IEN 6000
stand-alone voice-over-IP gateway. The vendor further
enhanced the box with phone-like software features such
as call waiting, call forwarding, local switching, extension
dialing and the ability to assign access charges or
privileges to a group of extensions.
Another gateway configuration features a switch with an
IP gateway add-on. Siemens AG, for example, announced
it's incorporating 3Com Corp.'s Internet gateway module
into its Class 5 switch.
But despite the flurry of voice-over-IP enhancements to
service provider products, Jeff Pulver, analyst at
research firm Pulver.com (www.pulver.com) and
chairman of Voice Over the Net Coalition, remains
unimpressed.
According to Pulver, a lot of the vendors' products are
"me too" announcements. He says hardware vendors
should gear much-needed products to the midrange
service provider market with capacity at more than 96
ports and fewer than 10,000.
IP Vs. Circuit Switch
Will the IP switch and gateway ever replace the
circuit-switched phone switch? The voice market is still
colossal, according to Dataquest Inc., at $100 billion in
revenue in 1997 and expectations of $150 billion in
revenue in 2002. The phone switch market is expected to
grow in other directions as well.
"As regulation is reduced, there will be more opportunity
to sell these switches to new carriers," says John Coons,
Dataquest's director and principal analyst for Internet
infrastructure.
And rather than replace it, it's more important that the IP
elements coexist with the circuit-switched world. New
access concentrator equipment often features voice
network signaling, known as Signaling System 7, and
voice-over-IP support. What's more, these platforms can
handle data, fax or voice within the same platform. The
signaling system support makes these platforms more
than an overlay onto a voice network. It allows IP
platforms to live alongside Class 5 switches as peers.
"While computer telephony products used to be an
overlay on top of the existing infrastructure, that's not
the case anymore," Coons says.
In this model, the network's architecture is slightly
different when it comes to where the remote access
equipment sits. Remote access concentrators could
reside next to a telephone company's central office
switch, which could switch long data calls onto the
remote access concentrator's platform in order to free up
the dial-up lines on the phone switch. According to
Coons, this model lets the local exchange carrier or
competitive local exchange carrier rise up the food chain
to provide a value-added dial-up service. It also allows
Internet service providers to do away with costly modem
pools and dial-up equipment.
But service providers may want to look closely at their
new IP voice connections. While they'll be able to
service more users on an IP connection with
compression -- 200 per one IP connection, as opposed to
64 on one T1 -- compressed IP connections don't carry
signaling well.
Smart service providers know that. For example, Qwest
(www.qwest.net) is not compressing its IP voice
services. It offers full 64-kilobit circuits within the IP
packet. "Right now, they get superior quality without
much IP overhead," Coons says. "That also sets them
up well in terms of the future to offer extra services like
fax in the remaining bandwidth in the pipe. "
Trying to find the right business model often means
making partnerships between vendors and service
providers from different industry segments, another
trend in this new market. The industry coalition for voice
on the Net, for example, is a mix of computer and
telecommunications companies, including Cisco Systems
Inc., Dialogic Corp., Intel Corp., Inter-Tel Inc., Lucent
Technologies Inc., Microsoft Corp., Vienna Systems
Corp. and VocalTec Communications Ltd.
The members will convene at the third Internet
Telephony Common Ground meeting in San Jose on
March 30 during the spring '98 Voice on the Net
Conference to discuss the effect of IP telephony on
universal service as defined by the Telecommunications
Reform Act of 1996.
"I hope to promote a dialogue that can give voice to our
belief that Internet telephony is a necessary and
inevitable consequence of an innovative Internet
industry and a boon for universal service," Pulver says.
Another uncommon partnership is one among Computer
City, Ericsson and Internet Global Services Inc.
(www.iglobal.net). IGS will sell its voice-over-IP service
using Ericsson's Phone Doubler and will make the deal
available at every Computer City store in Dallas. The
Phone Doubler lets end users make Internet- based calls
while they're online and allows a caller to bypass
long-distance charges by dialing into an IP-enabled local
phone office. |
