The keystone that will lock in VoIP as the successor to TDM technology has yet to be hefted into place. It may in fact take another decade before we see the full potential of VoIP phone systems. The keystone we are referring to is the deployment of standards based IP infrastructure by the public carriers.

VoIP phone systems are seemingly ubiquitous. Sexy new VoIP PBX systems and VoIP business solutions are announced almost every day. The technology is credible and past issues including voice quality have been sorted out. What’s the catch?

The catch is that the benefits realized by users of VoIP business phone systems relate mainly to internal communication. Organizations with distributed national and international operations gain the most from implementing VoIP phone systems. They achieve savings because their internal communication doesn’t go via PSTNs and they achieve significant savings as a consequence. Conversely, organizations that don’t have remote operations, work from home employees or a mobile workforce need to be far more creative in making a business case to justify a VoIP deployment.

The greatest pain for business is associated with external not internal communication. Most businesses have more customers than employees. To service, retain and acquire them a business must make an increasing volume of external phone calls. As most VoIP services interoperate via PSTNs employing TDM technology they are not using end-to-end VoIP services. Before that can happen the carriers must upgrade their infrastructure from TDM to VoIP technology.

Are the carriers about to upgrade their infrastructure any time soon? It’s unlikely. Collectively Tier 1 carriers have an enormous sunken investment in Class 4 and 5 switches. They work just fine and will probably continue to work for at least another decade. No matter how cheap the replacement VoIP gear, its more expensive than hardware that’s already installed and on the balance sheet.

Tier 1 carriers also have an investment in existing business models. These models are based on using TDM infrastructure not packets of data. Change is inevitable, but it always involves risk. The carriers have demonstrated time and again that they are risk averse, at least when it comes to tinkering with their main source of revenue. It’s been a topic of discussion for more than a decade, but there’s little evidence of change.

It’s also significant that there is little or no agreement on standards for carrier VoIP. There are even differences between carriers on how they handle SIP trunking and Caller ID. In the absence of enforceable standards between carriers there is little prospect of reliable VoIP peering between carriers any time soon.

For now and the immediate future, enterprise users of VoIP phone systems must reconcile themselves to enjoying less than fifty percent of the potential upside available from their VoIP business solutions. At some point the carriers will replace their infrastructure and agree on standards for IP-based carrier services, but it may take the entrance of a new breed of carrier before that comes to pass.

By: Chris H Green