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In March of this year, we presented a Special Focus feature
on the state of Internet Telephony, focusing on the years leading trends.
Vendors spoke out, identifying a number of technologies to watch and
singling out several key trends, including an increase in the number of
deployments of IP telephony-based technologies, and a general increase in
the perceived level of quality, both factors which allow our industry to
enjoy a growing measure of respectability and mainstream acceptance.
A month earlier, in February, we held our annual East coast-based
Internet Telephony Conference and EXPO, and as is already well known, the
event was a huge success. Even though the economy had yet to experience a
discernible upwards shift, and the aftermath of September 11 was still
affecting travel, our shows success was one of the early indications
in my view that our industry was enjoying a greater modicum of success,
and frankly was generating a much more positive attitude toward the days
ahead. I recently attended the spring Voice on the Net show in Seattle, WA,
and I have to say that the mood continues to improve, and the future keeps
getting rosier. I will have more to report on VoN in next months
Publishers Outlook.
But since the events in any sector of the technology industry change so
rapidly, I have decided to take the pulse of several leading companies in
our market, and see what they had to say regarding the future of Internet
telephony. So without further delay, I present the future of Internet
telephony.
ITXC
(Ed Hirschman, Vice President and GM, Worldwide Exchange Service)
RT: What areas of our industry seem to be doing
well right now?
EH: Today, carriers are accepting voice over the Internet as a way to
increase margins and revenues quality is no longer an issue. In fact, 60
percent of the traffic over ITXCs voice over the Internet network comes
from tier 1 carriers who demand high quality.
In addition, phone-to-phone calling over VoIP networks continues to grow.
According to the TeleGeography 2002 report, VoIP will account for 10 billion
minutes, or six percent of the worlds international traffic in 2001
up from the 6.2 billion minutes that TeleGeography had projected for 2001
last year. TeleGeography estimates that worldwide there will be over 160
billion minutes of international calling in 2001, up from over 135 billion
minutes in 2000.
RT: Whats your best guess as to what the market will look like in two
years? Five years?
EH: In two years, every major carrier will have implemented VoIP or will
be connected to another carriers VoIP network. Flat-rate consumer-base
pricing using VoIP will become more common, and could include free calling
between selected deregulated countries.
In five years, there will be an independent movement in which carriers,
enterprises, and residential fronts implement VoIP, and the networks will
eventually link to each other. Voice over the Internet will continue to move
networks to the edge and away from the traditional hub and spoke model.
Interoperability between VoIP equipment will be seamless and a non-issue.
The H.323 protocol will still be strong but we will see more commercial use
of SIP applications. Consumer VoIP applications will take hold and be
profitable for suppliers. Wireless carriers will use VoIP from the handset
to as far as it will go native IP. Flat rate pricing models will be
implemented in the wholesale level. The future will include all
international voice calls on the Internet by 2010.
VocalTec
(Arnold C. Englander, Vice President, Product Strategy and Planning)
RT: Are customers more accepting of IP telephony
these days?
AE: Absolutely. The strongest indication we see is the growing percentage
of VoIP traffic that is carried on a wholesale basis, under tight Service
Level Agreements (SLAs), where the calling parties have no idea or any
reason to suspect that their calls are VoIP.
RT: What does the future hold?
AE: VocalTec expects continued growth of VoIP as a percentage of total
international telephone traffic. This VoIP growth comes and will continue to
come from expansion in wholesale international long-distance networks and
new networks in deregulating and developing countries. As we approach 2004
and 2005, this growth in VoIP will also come from the replacement of legacy
TDM networks.
RT: Whats your best guess as to what the market will look like in two
years? Five years?
AE: In two years, VoIP will be key to large-scale rural telephony in
developing countries. In five years, VoIP will have raised the tele-density
of countries like India by a factor of three or four (which, for India,
implies almost as many new telephone lines as there are households in the
United States). In two years, people will take it for granted that many of
their long-distance calls are carried as VoIP (to surpass 50 percent within
five years). As a result, the VoIP equipment market will be pushed to a
level where only the fittest will survive.
RT: Are there any trends developing that might affect the industry as a
whole?
AE: Yes, several. Deregulation and large-scale rural telephony in
developing countries are two that come to mind. The rapid growth of
wholesale long-distance VoIP that is held to stringent SLAs and resold as
regular major-brand service is a third. QoS technologies, from MPLS to
sophisticated QoS-based routing algorithms inside of softswitches and
application severs, is a fourth. We think that the current telecom business
challenges are masking the positive outlook suggested by (at least) these
four trends.
General Bandwidth
(Brendon Mills, President and CEO)
RT: What does the future hold?
BM: With service provider capital spending budgets cut to the bone,
packet-based telephony will be rolled out pragmatically, on platforms that
allow a bridge between legacy and next-generation architectures. This lowers
risk, protects investments in existing infrastructure, and offers a means
for a gradual migration rather than forklift upgrades.
RT: What areas of the industry seem to be doing
better than others?
BM: Enterprise applications have clearly made more progress than the
residential opportunities for packet telephony. Leveraging broadband
networks as the transport mechanism for packet-based services to the
residential customer will broaden the penetration of these applications.
RT: Whats your best guess as to what the market will look like in five
years?
BM: We will begin to see the results of end-to-end IP applications, with
IP QoS in place to support a suite of applications over high-speed networks.
However, even five years from now, the majority of applications will rely on
legacy infrastructure.
RT: Are there any trends developing that might affect the industry as a
whole?
BM: Broadband in the local loop will enable the delivery of packet voice
to residential customers this will exponentially increase the potential
of the market.
Sonus Networks
(Terri Griffin, Vice President, Marketing)
RT: What does the future hold?
TG: While the conditions in the telecommunications market remain
challenging, we remain optimistic on the future of telecom. We believe that
the telecom industry will continue to serve as a key growth driver for the
global economy. Some segments of the market, such as optical transport,
which has seen significant over-building of capacity, may remain in deep
retrenchment, but for others, such as packet voice, the potential is
excellent.
RT: Are your customers more accepting of the technology now as opposed to
say, a few years ago?
TG: From a technology perspective, carriers are definitely more accepting
of VoIP the products that were just emerging three years ago have been
proven in the market and are continually being improved upon. The benefits
of packet voice remain the same as ever improved economics, in both
acquisition costs and ongoing operational costs, and new revenue
opportunities through the delivery of new services.
RT: What do you think the market will look like in two years? Five years?
TG: We are still at the very early stages of the packet voice market
carrier-grade packet voice solutions just began shipping nearly three years
ago. In that period, we saw the next-generation carriers and competitive
carriers deploying packet voice for applications such as trunking and
Internet offload. Now were beginning to see the incumbents evaluating and
trialing packet voice solutions for similar applications, and were also
seeing carriers beginning to trial and in some cases, selecting, packet
technologies for Class 5 applications.
Over the next two years, wed expect to see the incumbent carriers
going further with packet voice architectures for a range of Class 4 and
Class 5 applications. Wed also anticipate seeing growing adoption of
packet voice among international carriers, both the PTTs and emerging
carriers. Were also seeing newer entrants, such as cable operators and
wireless carriers, testing packet voice solutions now, with deployment
decisions coming later this year and into the next few years.
[ Return
To The May 2002 Table Of Contents ]
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