Thanks, Bob, More on IP-TELEPHONY below>>>>>>>>>>>>>>
The reasons for the low price of Internet telephony are the technical efficiency and economic advantages
(IDC in ITU, 1997) on a long-term basis. Cian Pablo Villamil, senior manager at Andersen Consulting stated,
"Originally it seemed that the opportunity for Internet telephony was in arbitraging
around regulator-imposed access charges and that the window of opportunity would close
as prices came down.Now, we find that Internet telephony has a long-term cost
advantage based on much lower equipment costs" (Evagora, 1997).
The packet switched technology uses infrastructure with much more efficiency than traditional circuit
switched telephony. The cost of computer equipment has fallen since the 1970s. So too, switching
equipment has fallen very sharply in price, while the falling cost of cabling has failed to keep pace
(according to Gordon Moore, one of the founders of the Intel Corporation). When the PSTN network was
laid (in the last century and beginning of this century), switches were expensive and lines were cheap.
Today low cost routers replace expensive switches, and with the lines being relatively expensive, packet
switching makes more economic sense, and can thus deliver the total quantity of data far more
efficiently. For packet switching, the cost works out to roughly 4 US cents per kilobyte, to be compared
with 15 US cents per kilobyte of data for circuit switching.
Some people have raised the question that breaking a voice signal down into a large number of packets
and adding a header to each one should introduce data overhead. But this is far less significant than the
much swifter compression update that can be made with the intelligent clients of the Internet than on
the hardware of the PSTN. On a circuit-switched system, all hardware throughout the network needs to be
updated in order to take advantage of an advance in compression. The Internet client, the standard PC,
can implement whatever the latest and best compression technologies are, and wherever they have been
implemented.
The customer can use IP for everything and thus have one network both for telephony and
internet/intranet as well as multimedia.
Even in its most basic form, speech carried over the Internet is considerably harder to bug than speech
that is carried in analog form over a twisted-pair copper wire. The matter is more serious still when the
software package that encodes the voice signals into packets also encrypts them. Many mathematicians
believe that a supercomputer would need to be operated for several weeks or months merely to decrypt
at two-minute phone conversation.
Economies of scale are inherent in the system, since the Internet, like the PSTN, is a network of many,
many networks. Even a small ISP can take advantage of the interconnection with other networks.
Common standards of Internet Telephony
Most vendors in the market have accepted the H.323 and T.120 standards, leading to wide
interoperability. (Adherence to a standard means that any IP user can talk to any other IP telephony
product). According to Frost & Sullivan, the new international standards are expected to drive a huge
growth in the Internet Telephony market in the coming years.
The history of public policy subsidies, especially in the United States, has made the development less
costly than that of the PSTN. Having developed over time, and through governmental bodies, there is no
need for the original researchers and developers to recover their capital costs.
In the United States, at least , ISPs to date, pay no access charges.
Internet telephony bypasses the international accounting rate system. A service provider with an
Internet telephony gateway in a foreign territory needs only pay a national interconnect payment, or
possibly even a local call charge rather than a settlement payment.
INTERNET COMMERCE
The Internet has been doubling in size every year for the past decade.
Among Internet market research companies, there is some degree of agreement that the total size of
web-generated sales in 1996 was around $2-3 billion. The market is set for explosive growth, but the predictions
vary from 110 per to 157 per cent. In 2001, Forrester predicts the market value to be $327 billion, ActiveMedia
$314, and IDC $220.
One can see Internet Commerce as a way of avoiding middlemen. But in practice, there is likely to be a continuing
role for middlemen or agent to help users track down the information they want. Those agents can be for
example:
Search engines
Internet Service Providers that are hosting Websites, and providing value-added packages
General Market Trends in Telecommunications
According to Kelly of ITU, the following, most likely scenario, is that the international telephony market will
fragment into three distinct operations:
Between countries, international alliances such as Concert, Global One and AT&T-Unisource will offer an
end-to-end connectivity where access is permitted or traditional half-circuit access where it is not.
These alliances will face growing competition from Internet telephony, from international facilities
owners (e.g. satellite operators, private cable operators) selling direct to consumers, and from the
burgeoning spot-market in resale rates.
For call-origination, competition will continue to be intense as new market entrants in areas such as
call-back, Internet telephony and resale compete with more conventional carriers who will promote their
brand name advantage through calling card services and loyalty schemes.
For call termination, competition will be slow to arrive as former and actual monopolies continue to hold
sway and to dictate rates for interconnection. Their dominant position will decline slowly, but it takes a
long time, and considerable investment, for new networks to be deployed. Thus, PTOs will seek to charge
the highest rates they are able for call termination while they still retain a dominant position.
Finally, for the PTOs Internet telephony poses a problem that they will have to deal with shortly. According to
ITU, " testing the viability of voice over the Internet, and perhaps deploying it broadly, is probably, from the
point of view, the best of a bad set of alternatives.they could even buy the ISPs who provide Internet
telephony or other companies who develop software (1997)".
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