Chris Gravett, sales and marketing director of Aculab, gave a wry keynote on VoIP opportunities that are both real and imagined on Wednesday, Oct. 11, during INTERNET TELEPHONY Conference & Expo, WEST.

“I come from a telephony background,” Gravett said. Through a show of hands, many members of the audience revealed they had a telephony background, too. “The VoIP opportunity is far bigger than the telecom industry. But let’s question a few things. I’m not questioning that IP is certainly the biggest disruption and has caused the biggest amount of change I believe we’ve ever seen in the telecom industry’s history. But what is the opportunity? Who is this VoIP opportunity for? In parts of the world consumers are making and placing free calls or at least less expensive calls. So it has been quite a big opportunity, but VoIP isn’t really just for consumers.”

VoIP has driven down the price of voice telephony traffic in enterprises, and they’ve taken some benefit from that.

“But that’s not the biggest opportunity,” Gravett said.

“As for carriers, they have the opportunity to invest and make gains from VoIP,” he continued. “Same thing with the equipment manufacturers. As with any disruptive technology, there have been new entrants who identify and seize an opportunity. Vonage (News - Alert) is an example. So perhaps there is an opportunity now in the communications industry for new entrants, unlike what has happened in the past.”

“My background is voice,” Gravett said. “The goal of VoIP was toll-bypass and price reduction, which was called ‘voice for free.’ It’s certainly a lot less expensive than it used to be. But voice alone is no longer in some places the preferred communication medium. Voice is not ‘sexy.’ You use email now to replace some telephone calls. Some use email instead of meeting face-to-face. We sometimes now use text on mobile and fixed telephones, IM and  SMS messaging where we used to use our voices. It’s cheaper, it’s quicker and it's often a more efficient form of communication. We use it in banking. It has replaced telephone banking, which in turn had replaced dealing with real people. E-commerce in general is another example of where we used to use our voices on the telephone to order things.”

“As for Vonage - a name linked with VoIP - a couple of months ago, someone said to me, ‘Since the Vonage IPO, Voice-over-IP has become a dirty word with investors. We’ve had investors who run away if the company's prospectus mentions VoIP.’ Fortunately, the Vonage IPO wasn’t as big news in Europe as it has been in the U.S. So I got myself up to speed to understand what had happened. I found a tale of high customer churn and found it had rising and very high customer acquisition costs. It had rising costs in general, and then a share price that was promoted like crazy. This affected customers, who were encouraged to take advantage of the IPO in the face of increasing and impressive competition.”

“Now let us look at IMS,” Gravett said. “IMS certainly looks like a big opportunity, so big that's there's a three-day conference on that subject here this week as part of Internet Telephony Expo West. But there are issues with IMS. All of the new services that are promised with IMS already exist. And yes, IMS will bring the mobile and the fixed networks to some kind of parity, but there’s also the potential that the enterprise will actually not appreciate the fact that the applications and services that they receive can be dictated to them by the network provider. Maybe they won’t want that.”

“It’s been said of the traditional telecoms industry that was like a very exclusive gentlemen's club with a very high joining fee,” he said. “And we all know who the members have been. And the members regularly get together in their club and work out standards and dictate what was happening in the industry to their benefit.”

“I've heard it said that IMS is really stuck in a new club down the road, with new members that are trying hard to take over the exclusive area of telephony that’s been owned for a long time by its few members. That all sounds negative, and I don’t mean to be so downbeat,” Gravett said, apologetically.

“The first place I actually do see opportunity is in the transition to pure IP,” he said. “We’re in the middle of that transition now, and who knows how long it’s going to take. I believe the transition it’s going to be increasingly rapid, but it could take a year or five years. I don’t think it will take longer than five years. And so there is opportunity there at the moment for people from the traditional telephony industry. There’s a big demand for gateways, and although there are massive supplies, there is an increasing demand on a daily basis for some kind of gateway functionality that will enable companies to operate during this transition period. So, the supply of appropriate gateways that do the job is not meeting the demand at the moment.”

“Moreover, there are some massive projects, such as BT’s 21C to change their backbone in the U.K. to packets,” Gravett added. “It’s opening up opportunities for a range of companies to get involved in it.”

“All of these opportunities in the transition period will exist only for a finite period of time. We will at some point actually get to the pure IP world.”

“Now,” said Gravett, “let’s talk about quality for a while. VoIP quality sometimes isn’t as good, or hasn’t been as good, as our traditional PSTN. VoIP, as it’s free or much cheaper to place calls, leads to a trade-off. Perhaps we’ll accept a drop in audio quality in order to save money. Certainly that has been said when dealing with the GSM mobile operators, and I guess it’s true that we actually have to accept that calls drop and phone coverage doesn’t reach everywhere, and that we must say things like ‘I apologize for the quality of the call, I’m on a mobile phone.’”

“However, in the case of the transition to VoIP, we’ve always have the opportunity to call back on a land line, or call back with a better connection,” Gravett said. “Once we get to pure IP, then we don’t have an alternate opportunity anymore and maybe quality is going to increasingly matter as we go through this period.”

Gravett indicated that many IP Communications opportunities exist, but that there has been an amazing amount of hype and misinterpretation surrounding IP.

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Richard Grigonis is an internationally-known technology editor and writer. Prior to joining TMC, he was the Editor-in-Chief of VON Magazine from its founding in 2003 to August 2006. He also served as the Chief Technical Editor of CMP Media’s Computer Telephony magazine (later called Communications Convergence (News - Alert)) from its first year of operation in 1994 until 2003. In addition, he has written five books on computers and telecom (including the Computer Telephony Encyclopedia and Dictionary of IP Communications). To see more of his articles, please visit his columnist page.