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Mind Share
August 2004

Marc Robins

The Battle for Broadband Telephony Supremacy


Things are really getting interesting in the broadband telephony arena, as IXCs and cable and DSL service providers jump in and jockey for competitive advantage in this nascent marketplace. Indeed, the list of players reads like a service provider �who�s who.� Recently, cable operator Cablevision announced a new �triple-play� offering for new subscribers, which bundles digital TV service, cable modem, and phone service in a package that prices each service at a flat $29.95 (or under $90 for the bundle). Comcast unveiled plans to offer cable telephony service to their entire subscriber base in a couple of years. SBC countered with an announcement that they will invest $6 billion over the next few years to be able to offer video over their network. And we all remember, a little while back, that AT&T threw its big hat in the VoIP ring to compete with Vonage and the like. Now rumors swirl that MCI and Sprint will follow suit.


The broadband telephony feeding frenzy, while serving to dramatically raise IP telephony�s public profile and overall industry prospects, is also a double-edged sword: there are a number of hurdles in the path to success, which while not insurmountable, have the potential to restrain growth and curtail the current high-level of enthusiasm. If the frenzy of �one-upmanship� continues without addressing things like installation and troubleshooting issues, cordless capabilities, and network infrastructure performance and QoS, uptake for these innovative, new services will certainly take a hit.

It�s important to remember that there are currently slightly more than 100,000 subscribers to broadband telephony services � a mere drop in the big telecom bucket � and that this 100K is probably the cream off the top of the early-adopter crop. In order for broadband telephony services to truly mainstream, and appeal to the average Jane and Joe subscriber, the services must be designed to address usability and reliability concerns head-on.

Take the installation process. For the average consumer � even the technologically adept user � networking remains something of a black art. For someone faced with installing a home network � including WiFi � the task is still a fairly daunting undertaking. Even experienced users are having some serious issues: see Rich Tehrani�s column entitled �AT&T CallVantage: Checking Under the Hood� (www.tmcnet.com/13.1). Although the process is getting easier, it is still rife with pitfalls. (Consider such issues as security, which something like 70 percent or more of home WiFi users do not enable due to confusion and frustration). For broadband telephony services that require the installation of a separate IAD, things can get downright hairy � especially if Wi-Fi routers, hardware-based firewalls and the like are being employed. Cablevision got it right by building a cable modem that integrates telephony services, but the bottom line is the industry has to figure out ways to simplify the whole process so that it approaches a near �plug and talk� experience.

With respect to cordless capabilities, there is thankfully some great progress occurring in the Wi-Fi telephony space � progress that I believe will have a major impact on broadband telephony uptake. The home environment is very different from the workplace when it comes to the ratio of cordless to corded phone sets. Chances are that at least 90 percent of all homes have cordless phones in use, as opposed to practically zero percent in offices and workplaces. In order for VoIP to take off in the home, a practical strategy to put cordless IP phones in the hands of users is critical. This is where Wi-Fi telephony comes in. Motorola is set to sell a $300 phone by the end of the year that can begin a call using a wireless network and let it be automatically rerouted to a cell network if you move out of range of the Wi-Fi network. Cisco is reportedly working on cordless phones that can be used in any home with a broadband connection and Wi-Fi router, and Vonage is reportedly planning to introduce a similar phone by the end of the year.

Finally, with respect to network infrastructure performance and QoS, much needs to be done in terms of network assurance to provide the level of quality and reliability the (hopefully) many millions of broadband telephony users will demand. A new breed of Infrastructure Performance Management (IPM) solutions are coming to market that will help service providers pinpoint trouble spots and pave the way to trouble-free communications.

Having witnessed firsthand the IP telephony industry evolve from single-port, analog gateways to full-blown Class 5 softswitches, I have no doubt that such challenges as mentioned above will be overcome in short order with characteristic ingenuity.

Marc has been involved in the telecommunications industry as a researcher and analyst, author and publisher, and marketing executive and consultant for more than 23 years. Marc recently served for five years as Vice President of Publications and Trade Shows and Group Editorial Director at TMC. Most recently, Marc launched a new marketing communications and services company, Robins Consulting Group, offering an array of professional services to the IP telephony industry. Contact RCG at 718-548-7245 or e-mail [email protected]

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