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by Todd Judd Erickson
Why You Should Care
The potential of packetized voice has grasped the attention of many of today's top service providers and network equipment vendors. As voice over IP (VoIP) technology matures, more service providers will deploy the ever-expanding assortment of advanced IP telephony services. Learn the status of VoIP technology and latest VoIP applications.
Delivering voice calls through the same Internet protocol (IP) networks that carry e-mail and Web traffic is the promise of voice over IP (VoIP) technology. Hailed as one of the keys to the unification of voice, video and data on the same pipes, VoIP was the golden child of the convergence crowd; that is, before the bottom fell out of capital spending. With no apparent and immediate contributions to the bottom line, VoIP deployment plans slowed, put on the back burners until the technology and its promised applications would advance to warrant the necessary installations and upgrades.
As the attention of the communications industry shifted to technologies that reduce capital and operating costs, VoIP may have lost its golden sheen, but it remains a promising option to traditional (and expensive) circuit-based communications, even more so with its continued maturity and broadening appeal to enterprises, small office/home offices (SOHO) and even consumers.
The lack of announced VoIP technology breakthroughs should not keep service providers from considering VoIP systems. Much of the technology is now carrier-grade, a big improvement from earlier VoIP calls, which made users feel like they were speaking and hearing foreign languages because of network latency and jitter.
And, the explosion of new applications utilizing VoIP will draw providers looking to offer new and profitable services to customers.
TECHNOLOGY PRIMER
Traditional circuit-based voice networks use time division multiplexing (TDM) architectures to deliver exceptional quality of service (QoS), but limited applications.
VoIP uses the flexibility of IP to formulate creative, yet practical services. However, in the past, it lacked the reliability and consistency the public has come to expect from the public switched telephone network (PSTN).
VoIP must integrate the futuristic applications of IP and the reliability of plain old telephone service (POTS) to convince cash-strapped service providers to pay for the TDM-to-IP conversion.
A VoIP network consists of four layers:
The continuing maturity of softswitches at the call control layer, and the introduction of new technologies, such as multi-protocol label switching (MPLS), is pushing VoIP ever closer to carrier-grade service. This is important as multi-national communications companies seek to integrate VoIP into their core networks.
The introduction of numerous pieces of equipment at all layers of the model is also helping to raise the level of VoIP quality.
The end result of the introduction of new elements and development of existing technologies is the advancement of voice over data network transport.
Dana Tardelli, a senior analyst for communications services at the Boston-based Aberdeen Group (www.aberdeen.com), said in a May 2002 report, What Works: Significant Voice Over IP Deployments of 2001, which profiles 11 case studies of successful service provider VoIP deployments, "though converged networks have been promised by technology providers for years, [our] research indicates that 2001 was a watershed period for VoIP. End-to-end technology is now carrier class, dispelling the common myths of poor quality and reliability that have hampered adoption."
"What we are starting to see is the maturity of the technology in every aspect. If you start with the basic hardware, you see a lot higher reliability, a lot larger density and scale, which drives the costs down and drives prices down because of the scale and the maturity," says Ira Palti, chief operating officer of Herzlia, Israel-based VocalTec Communications Ltd. (www.vocaltec.com), a worldwide provider of carrier-grade VoIP equipment. "And its not just the core networking technology, but the back office programs, such as billing and provisioning," Palti adds.
Inadequate technology is no longer the buzz around VoIP. Unfortunately, just when the technology reached the necessary service levels, the capital crunch began.
LIFE GETS UGLY FOR FORMER MARKET PIN-UP
As is the case with many Internet technologies, VoIP has been hit hard by the global capital expenditure famine.
In April, Scottsdale, Az.-based market research firm In-Stat/MDR (www.instat.com) estimated that worldwide service provider capital expenditure budgets decreased by 11 percent from 2000. In-Stat also expects those budgets to decline a further 20 percent in 2002.
One of the consequences of this budget slashing is the slowdown of new technology adoption, VoIP included. As an example, Norm Bogen, In-Stat's director of WAN infrastructure and services research unit, says media gateway shipment revenue will drop from $949 million in 2001 to $596 million in 2002, a staggering 37 percent drop in one year.
Even the number of IP gateway ports shipped, which increased last year in the face of the capex slowdown, will decrease significantly in 2002, Bogen says.
However, as most analysts expect capital spending to start increasing in late 2002 or early 2003, Bogen expects the expenditures on VoIP equipment will rise, as well. Bogen estimates that media gateway shipment revenue will increase to $883 million in 2003, and reach $2.74 billion in 2006.
IP gateway port shipments will recover, as well, jumping to 8.28 million in 2003 and reaching 27.04 million by 2006.
While sectors of the networking industry did not survive the capex crunch, Cedar Knolls, N.J.-based Probe Research Inc. (www.proberesearch.com) said in its Year End Wrap-up: Annual Outlook and Review, "[Voice over packet] fared better than most other communications segments, perhaps attributable to the resilience of youth."
While equipment revenues may be declining, at least in the short term, VoIP use is not, especially in the long-distance networks.
Probe Research estimated that local voice over packet (VoP) traffic grew more slowly than anticipated but reached an estimated 4.3 billion minutes in 2001 and is expected to grow to 825 billion minutes of use by 2007. The 2001 report states: "There is growing agreement that the migration to VoIP, particularly at the edge, will be gradual.”
Probe forecasts that in 2002, overall VoIP traffic is anticipated to grow 171 percent fueled mainly by local and domestic long distance deployments. Where U.S. national providers are deploying VoIP technology outside of long-haul networks is in metropolitan areas, with large switches running out of capacity, partly due to the increasing number of wireless and long distance connections, says Jenna Stanley, director of marketing for Brampton, Ontario-based Nortel Networks Corp. (www.nortelnetworks.com).
Stanley cites as evidence two recent customer agreements with Denver, Colo.-based Qwest Communications International Inc. (www.qwest.com) and Overland Park, Kan.-based Sprint Communications Co. L.P. (www.sprint.com), the later valued at nearly $1.1 billion.
VoIP ADVANTAGES AND DISADVANTAGES
VoIP's increased acceptance and usage stems from its promise of lower operating costs, increased workplace efficiency and simpler network administration. Some of the technologys advantages include:
In an August 2001 report, Voices Next Evolution, Cambridge, Mass.-based Forrester Research Inc. (www.forrester.com) compared the switching costs of legacy equipment versus using softswitches from vendors such as Westford, Mass.-based Sonus Networks Inc. (www.sonusnetworks.com). When integrated with servers that feature hosting call control and applications, the softswitches can support many Class 5 switch capabilities, such as caller ID and call waiting, for $12 per subscriber, rather than circuit-switch equipment costs of up to $90 per subscriber, an 87 percent cost decrease.
Up-front capital costs will approach circuit-switched equipment soon, as well, although not as fast as expected given the rapid plunge of other Internet technology costs. In-Stat forecasts at least a 23 percent drop in packet-based integrated access device (IAD) costs by 2006, driven by decreasing component costs and price competition from other vendors and other technologies.
Enterprises, small companies and end users also enjoy potentially dramatic cost savings. For enterprises, the main benefit is only paying for data transport, and avoiding higher voice transmission fees. Van Phung, vice president of next generation networks solutions at Munich-based Siemens AG (www.siemens.com), explains that most medium to large enterprises must buy a frame relay or asynchronous transport mode (ATM) connection for data, and a primary rate interface (PRI), or T-1, for voice. With VoIP, the enterprise need only buy the data connection.
Delta, British Columbia-based Infotel Systems Corp. (www.infotel-systems.com), a telecommunications consulting and training organization, has even developed a “VoIP Calculator” at www.infotel-systems.com/voip_exe.htm (requires registration) that purportedly will help end users determine how much they will save by adopting a VoIP system.
Notwithstanding the rosy picture painted above, there are reasons why VoIP has not grasped the hearts of every systems administrator:
To establish voice paths between VoIP users, each end user device must be able to access the other device’s real time transfer protocol (RTP) port, says Siemens Phung. Because the RTP port is not commonly accessed, like the HTTP port, most firewalls block requests for an RTP connection, considering them potential cracker attacks.
Phung says the firewall issues are being worked on in an Internet Engineering Task Force (IETF; www.ietf.org) working group, but it will be months before they are completely resolved and implemented.
Now that the technology is sound, and the tech recession is, hopefully, abating, the emerging applications have come to the forefront and grabbed the attention of service providers around the world.
GETTING TO THE GOOD STUFF
Currently, VoIP systems run international and national long-distance networks so Class 4 switch operators can take advantage of the new technologies, while not having to deploy the equipment in hundreds or thousands of local central offices (COs).
“[A long distance carrier can] use [its] broadband access network to collect all of its voice over IP traffic, aggregate it at one or two points, and hand it off to a traditional long distance carrier, such as MCI, AT&T or Sprint,” says Marcio Avillez, director of marketing for global softswitch services for Broomfield, Colo.-based Level 3 Communications Inc. (www.level3.com). “They can deliver that call pretty easily, [they] only have to build out one or two maybe three points of interconnect to do that, which is not all that expensive.”
Outside of the Class 4 networks, many service providers are using VoIP technology to offer advanced local services.
Siemens’ Phung described one such VoIP application used by an unnamed SP customer in a university campus environment. Since academic campuses normally have people frequently moving in and out of residence halls, a well-engineered, private VoIP system utilizing SIP phones allows people to move around the campus voice network without constant manual network configuration. When SIP phones are plugged into the VoIP network, they automatically register themselves.
“I believe that the market for the end-to-end, or the voice over IP capable device on the users’ desk, for example the SIP phone and the Microsoft clients, is going to see some significant deployments over the next few months, especially in the environments where people are having a lot of seats, such as the academic or university environments,” Phung says.
Phung described another business VoIP application called presence services. Members of a workgroup log into a presence application similar to America Online’s instant messenger (AOL IM) program. Each workgroup member has configured his or her profile to indicate when he can be contacted and how he can be reached, whether by desk phone, cell phone or pager. The service also tells other workgroup members when not to contact each other, possibly because the person is in a meeting, traveling, or spending time with family.
Presence services can be integrated with Microsoft Outlook features to enable one-click calling and bridge conferencing. A SIP phone integrated with Outlook can determine where a person is and if he or she can be contacted for a simple phone call or national phone conference.
Layering packetized voice services on an established virtual private network (VPN) is another application on the rise. VocalTec’s Palti describes the company’s interoffice voice over VPN system where anyone attached to the VPN can dial a four-digit number and reach any colleague on the network anywhere in the world.
The call is transferred through the local TDM system to the global IP system. Additional voice over VPN features include call following (such as forwarding office calls to a cell phone), where the external device (cell phone) becomes an extension of the voice over VPN system. The voice over VPN application can overlay the data VPN on an existing private IP network, or the public IP network.
The call is transferred through the local TDM system to the global IP system. Additional voice over VPN features include call following (such as forwarding office calls to a cell phone), where the external device (cell phone) becomes an extension of the voice over VPN system. The voice over VPN application can overlay the data VPN on an existing private IP network, or the public IP network.
While many pundits dismiss the residential market for VoIP, some think it can be just as lucrative as the business market.
Phung says the combination of DSL and VoIP can have significant advantages for residential customers. For example, with a typical industry voice compression of four-to-one, only 16 Kbps are required for voice channels. With a 256 Kbps DSL connection, residential subscribers can have multiple voice lines for family members, home offices or fax machines. This potential service can also help generate additional revenue streams for broadband service providers.
One service provider is using a VoIP-enabled network to offer unlimited, nationwide calling for a set, monthly fee below $40. Edison, N.J.-based Vonage Holdings Corp. (www.vonage.com) offers DigitalVoice, its unlimited calling plan for $39.99 per month, which includes voice mail, caller ID and other typical advanced voice services. The price does not include a $29.99 installation fee or $9.95 for shipping and handling.
Vonage uses SIP and VoIP gateways to bridge the PSTN and Internet through its proprietary technology called SIP-thru-NAT. The company guarantees the quality of service for 30 days after activation, and will waive the $200 early termination fees if customers are not satisfied.
Vonage uses San Jose, Calif.-based Cisco Systems Inc. (www.cisco.com) ATA 186 analog telephone handset-to-Ethernet adapters ( www.cisco.com/warp/public/cc/pd/as/180/186/) that “interfaces regular analog telephones with IP-based telephony networks,” according to Cisco’s product literature. The ATA 186 is installed at the subscriber’s premises and supports two voice ports, each with its own independent telephone number.
In addition to the traditional voice services, Vonage offers customers:
The company also offers a 500 minute nationwide package that only charges for outbound, off-net calls. The overage charge is 4.9 cents per minute. Vonage cautions on its Web site that its products are considered “second line” services and the company does not offer E911 services.
Online gamers may also have something to look forward with the push to get VoIP services out to the edge of the network. A VoIP system can enable real-time, voice interaction with online gaming. Online participants in the same game (such as a “Grand Theft Auto” meeting or a “Doom” dungeon) can talk and interact with each other in real-time, something that is not possible with separate voice and data channels.
Phung even related a short story about an online gamer that picked up a sword in an online interactive role playing game, and put the sword on the San Jose, Calif.-based eBay Inc.’s (www.ebay.com) auction site. The gamer received a $400 bid for the game sword, and using VoIP, was able to meet the winning bidder in the online game to hand it over.
APPLICATIONS IN A BOX
One equipment vendor, Marlborough, Mass.-based ThinkEngine Networks Inc. (www.thinkengine.com), offers wireline and wireless carriers and voice application service providers (ASPs) a stand-alone, multi-network, integrated single-platform of software, hardware and network interfaces architected for advanced voice services, including signal processing, gateways, automated speech recognition (ASR) and text-to-speech (TTS). Its TEN1000 Voice Service Platform simultaneously handles both PSTN and IP voice streams. It is expected to be available in the third quarter of 2002.
Campbell, Calif.-based Sylantro Systems Corp. (www.sylantro.com) goes one step further by offering service providers managed telephony services, including hosted IP PBX and IP centrex services. The company says its applications switch platform allows service providers to generate additional high-margin revenues by replacing today’s in-house PBX and key systems.
While VoIP applications are the sexy part of the complex voice service, the technology must continue to mature to maintain its growth in the public markets. The industry must also address the problems associated with its deployment, such as reaching local COs to allow neighborhood calls, not just national and international long-distance calls.
“It’s great to talk about all the applications, but, at the end of the day, if somebody can’t make a call down the street and not pay long distance charges, then you really haven’t delivered anything of value to the end user, “ Avillez concludes.
Other challenges to packetized voice include getting service providers to deploy and trust the technology, and educating businesses and consumers on its value.
And, as always, with the rollout of new advanced products, customer service will be key to the success of those that bravely step into the next generation of communications networks. Global scalability and advanced services are important, but service and support will go a long way in determining the success of every new advance in network technology.