June 2003
VoIP -- On The Path To Mainstream Success
BY MICAELA GIUHAT
Voice over IP continues to gain traction among service providers as the
industry takes a stabilized and conservative approach to new service
deployment. However, examples of commercially deployed VoIP services are
still considered �case studies.� This article will examine some of the early
implementations of VoIP services, in an attempt to discover what common
characteristics are driving new services across the chasm from trial to
widespread adoption.
What keeps VoIP from crossing the chasm?
The answer is simple: until now we have put the cart before the horse,
and we have tried to convince ourselves that it will work. If we take an
honest look at the telecommunications industry we see that real-time voice
communications have been around for quite sometime. Additionally, we enjoy
all the bells and whistles of voice services and consider them basic
offerings. However, we did not start this way. Initially, we started with
basic telephone services and basic dial tone. We were satisfied with
mechanical and electromechanical switches that offered no features
whatsoever. The next significant development in telephony was the
introduction of digital switches, again with no features. After having spent
time and investment dollars to solve the issue of basic service, we then
began to add on the CLASS services (Three-Way Calling, Call Forwarding,
etc). When we examine that pattern, a natural technology evolution of
mastering one concept and then moving on to the next, it raises the question
of why are we trying to skip basic IP dial tone, and go directly to offering
IP bells and whistles? Let us not forget the relevance and lessons learned
from telecom history and remember that services reside on a solid foundation
of both technical and practical capabilities. That being said, there is no
killer application -- the killer application is VoIP itself.
PRAGMATIC APPROACH
Gone are the days of developing new platforms, and experimenting with new
technologies as normal business and product development models. Today we are
a pragmatic industry out of necessity. Carriers realize the need for a
practical and phased approach to VoIP deployments. They are kicking off the
process by thinking about VoIP as a service, as opposed to looking at it as
only the means to provide new services.
To do this means the ability to:
� Offer VoIP as a basic service.
� Secure VoIP services.
� Bill VoIP as a basic service.
� Add on enhanced services.
VoIP Basic Service
Offering VoIP as a basic service translates into providing the missing link
between the VoIP islands that have developed over the last few years:
enterprise VoIP islands and carrier or backbone VoIP islands. Providing
managed native access to enterprises is the first step in establishing VoIP
as a service.
There are some very clear economic advantages for enterprise customers to
purchase basic managed VoIP services which include: decreasing enterprise
costs by eliminating the need for expensive CPE equipment (e.g., VoIP
gateways to translate from enterprise VoIP to ILEC PRI access), and PRIs
(which cost much more than a regular T1, while having limited bandwidth
utilization). Customer testimonials estimate that by using one vendor and
integrating voice and data, they were able to save between $10,000 to
$15,000 up front, while providing yearly savings on both phones and data
were projected at $3,000 to $4,000).
There are also service advantages for the carrier as well as enterprise
customers, as seen in the following comparison:
Carrier
- Managed T1 Provides up to 60 percent greater revenue than T1;
- Inter-enterprise connectivity over Native IP;
- Session Admission Control;
- Session Detail Records;
- Less customer churn.
Enterprise
- Managed VoIP Cost 20 percent Less than PRI;
- Inter-enterprise connectivity over Native IP;
- Session Admission Control;
- Session Detail Records;
- Easier Moves/Adds/Changes.
In addition to the economic advantages, there are also significant
technical advantages in replacing traditional PRIs with managed T1s for
VoIP.
Securing VoIP
There is a basic level of security afforded to networking systems that are
deployed in a VoIP network. However, this is less than absolute protection
and when bridging VoIP islands it is imperative to be able to cross carrier
and enterprise VoIP networks without compromising security or requiring
costly equipment upgrades.
Security problems are severe enough to have limited the deployment of IP
telephony services over leased lines or the Internet. VoIP presents several
new challenges for firewalls, address translation, and security attacks. In
order to offer VoIP services, carriers must cautiously think through network
topology deployments, especially since we have been witness to a number of
malicious attacks that have brought companies to their knees. Carriers that
have done this realize that there is a new device required in their networks
called Session Controllers. Session Controllers will seamlessly solve the
security issues surrounding VoIP deployments.
Any service that uses IP as the foundation protocol needs to be secured
and delivered in a way that the impact to existing infrastructure is
minimal, such as no firewall updates or expensive CPE additions. After
security mechanisms are transparently put in place, such as session
controllers, there is one more step before carriers can legitimately start
selling VoIP service.
VoIP Billing
VoIP billing is a rather significant barrier to deal with effectively.
Service providers that haven�t figured out how to bill for VoIP calls will
end up carrying the traffic for free. No service provider, young or old, can
afford to do anything for free anymore. Which brings us back to the most
basic reason why service providers are now interested in new VoIP usage and
billing systems: their shrunken market caps and swollen debt loads are
making them desperate for revenue.
In the past, part of the reason carriers have expressed low interest in
VoIP billing may also be due to the lack of traffic information, or best
effort attribute of the IP communication model. However, with new devices
such as session controllers, VoIP sessions can be serviced and billed
accurately. Session controllers will be a catalyst for VoIP by providing the
ability to collect information on a session-by-session basis, which not only
includes signaling details (Caller ID, time, etc.), but also vital data
about the actual voice packets. Session controllers capture, collect and
remember the vital statistics for every session such as the number of
packets sent or received and the inter-arrival time between packets, just to
name a few.
Carriers can now capture critical data previously unavailable to them and
use it for billing and tariff purposes. This enables the service provider to
accomplishing the second step in establishing true VoIP services.
Adding Enhanced Services
After the service provider has managed VoIP service in place, they are then
in a position and prepared to add revenue-bearing services, such as IP
Centrex, Unified Messaging, or any other VoIP service.
With the right framework in place, carriers will now have the basis of a
billable VoIP basic service. Just as we enjoy new service opportunities with
basic telephony, those same service opportunities can now evolve from VoIP �
the sky�s the limit. Any hosted service can be provided, many new services
can be developed, services can be customized, and third-party vendors can
truly profit from the openness of the end-to-end VoIP architecture, creating
a win-win situation for both service providers and end-user customers.
More so, after experiencing and enjoying the benefits of VoIP as the
first real-time, session-based service, multimedia services will be a
natural market evolution with services such as Collaborative Working and
Gaming.
Enhanced VoIP services and multimedia services will, in the end, be the
multipliers that will account for the exceptional VoIP growth we will see in
the years to come. However, these services are not possible until the right
foundation is in place.
CONCLUSION
While cost savings for both customers and service providers are driving
near-term growth of VoIP, according to an Insight Research study, titled �IP
Telephony: Service Revenue and OSS Expenditures for Voice over Packet
Networks 2002-2007,� VoIP revenues are about to �explode� within five years,
with VoIP revenues growing from $13 billion worldwide in 2002 to nearly $197
billion by 2007. To achieve that figure, VoIP services will grow at a
compounded rate of more than 72 percent over the forecast period, a figure
that would make packet-voice services one of the fastest-growing segments in
telecommunications.
Micaela Giuhat, assistant vice president of product management at
Netrake Corporation, is responsible for developing strategic planning,
business development and market requirements for Netrake�s powerful Network
Processing Platform. She brings with her more than 15 years of experience
designing and developing technologies for voice and data networks in the
telecommunications industry. For more information, please visit
www.netrake.com.
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