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
Posts Tagged ‘Tier 1’
VoIP Phone Systems – There’s a Fly in the Ointment
February 14th, 2010The Right Time to Invest In VoIP
December 22nd, 2009
Till a few years ago, VoIP was a name that brought forth many apprehensions in mind about its survival. However, VoIP has come back with a huge bang forcing the entire business industry to take it seriously. The technology itself is simple enough to understand. VoIP technology converts analogy signals which exist in the form of our voice into small digital IP packets, compress it and send it over the bandwidth through the Internet. It reaches the receiver in the form of analog signal which has been decompressed.
Business houses and residential homes both have started utilizing voice over IP technology for fulfilling their communication needs. This technology is extremely flexible, benefiting corporates and end users alike. Voice over Internet protocol is also available in the form of calling cards. Calling card companies have started relying in a big way on VoIP. This is because it offers cost effective communication, thereby raising their profit margin.
Other users of this technology could be wholesale carrier service providers, resellers, ISPs, ITSP’s and residentials.
ISP and ITSP’s already have an established network of broadband services which they offer to their clients. They can equip their services with VOIP and offer a complete telephony solution to their clients. This gives them an added advantage over their competitors and helps in building brand preference.
Wholesale carrier service providers are those providers who purchase VoIP connectivity or minutes in bulk from Tier 1 service providers. It is ideal for those who are willing to make a substantial investment in this business and also have technical knowledge about voice over IP service. They are those providers who eventually get the advantage of controlling the telecom industry by controlling the pricing.
A reseller on the other hand doesn’t have to make a substantial investment in the telecom business since the infrastructure and technical equipments are provided by the wholesaler or service provider. A reseller is like a retailer, who acts as a middleman between wholesalers and end users.
Keeping in mind the popularity and the potential of this technology it would be beneficial for companies to invest in this business at this hour in order to make a killing and establish themselves as a brand in future.
By: Kristen Kiya
