VoIP - Let Us Talk IP

This one is for Ripley’s believe it or not. Imagine oneyear down the line, the number of long distance calls you make goes upsubstantially but the usage bill comes down drastically. Or suddenly youdiscover you have more bandwidth to use without actually having bought more ofit. And to cap it all, you make a no nuisance shift to voice, data and videoconvergence using a single network leading to a more efficient use of theexisting transmission capacity.

Who would you thank for this? Cut throat competition? May be.But before that you must thank some thing called Voice-over-Internet Protocol (VoIP).For, it is largely because of VoIP that voice telephony is poised to enter a newera of pruned costs and efficient bandwidth management.

What Is It?

Technologically speaking, VoIP refers to the ability to carrytoll quality voice, using compression techniques and packet switching over theIP network. VoIP converts voice into packets of digital data–just like text orimages–which share the line with other packets of data. The voice packetstravel over the IP network using the same network protocol that data uses–theInternet Protocol or IP. When used in a private intranet or WAN, it is generallyknown as VoIP but when the public Internet is the transport vehicle, it isreferred to as "Internet telephony". Simply put, VoIP is a technologythat allows real-time transmission of voice across Internet.

What Are the Drivers?

It is the economics that is driving voice carriers all overthe world towards the use of VoIP. This shift has also resulted from the factthe world over data traffic has been growing rapidly and is expected to outgrowvoice traffic very soon. This has prompted service providers to concentrate moreon the former. While IP telephony may already be a reality in more countries inthe developed world, those in the Asia Pacific are not far behind. Laterealization and policy inertia notwithstanding, India too is slowly gettingaware of its benefits. The DoT has already sanctioned a VoIP-based telephonypilot project to be run across several cities in the country. Corporates too areresponding to the benefits that VoIP application entails in their day-to-daymulti-location communication.

The single most significant benefit that VoIP promises is thesubstantial reduction in costs, both for the service providers and the users.For carriers, costs go down because packet switching entails more efficientutilization of network capacity (read bandwidth). This allows carriers to carryboth voice and data over the IP networks at a far lower cost. Consumers benefitas the service providers’ savings from lower switching costs and lower percall bandwidth is passed on to them. In the US, VoIP-based long distance callscost 25 to 50 percent lower than the services offered by the service providersusing circuit switching. "With the usage of compression techniques, silencesuppression techniques and including the packetization overheads, technically itis possible to bring down the per-call bandwidth usage to one-fourth of what isbeing currently used by conventional voice carriers," observes SV Ramana,systems engineering manager, Cisco Systems (India) Pvt Ltd.

The World Scenario

So, how fast is the world moving towards VoIP-basedtelephony? Given the fact that the world is fast moving towards a situationwhere data traffic would far outnumber its voice counterpart, new networks areshying away from investing in new circuit switches. Positioned as data networks,these new IP-based networks would treat voice traffic as just an inconsequentialapplication amidst a number of value-added apps like voice mail, fax store andforward, unified messaging, Internet call waiting and virtual second line. Theseare services that are being offered not only by the traditional voice carrierswho have IP-enabled their networks, but also by ISPs who already operate suchnetworks for data traffic. "Major carriers such as AT&T in the US andTelstra in Australia have taken decisions not to invest in PSTN switches anymoreand to invest in IP only for all future network expansions. Today, only a smallfraction of calls are carried on IP. But this is changing fast as data networksbecome more ubiquitous than voice networks and voice is considered to be an ‘application’on data networks," points Daniel T Dreymann, vice president, (Sales),Arelnet Ltd. Arelnet, a VoIP solutions company, recently announced its Indiaplans.

Forget the West, nearer home while China, Hong Kong, Taiwan,Japan and Singapore have already moved towards packetized voice telephony in abig way. Thailand, Philippines, Malaysia and Indonesia would see action on thisfront soon. Apart from cheap call rates, VoIP has opened up new revenueopportunities for service providers from value-added services and Web-based callcentres. In fact, in countries like China, Japan and Singapore, the ISPs werethe first to offer cheap international call rates driving the incumbent longdistance voice carriers to invest heavily in VoIP platforms during the pastyear. The Boston-based Yankee Group estimates that the region could begenerating more than three billion minutes of legal IP telephony traffic in2002. China is a good example of the success of IP telephony in the region.Pre-paid IP telephony services were opened up last year leading to around 70percent decrease in standard international long distance call rates. There arenow four players including the state-owned China Telecom offering IP telephonyservices.

The Indian Reality

Given the relatively high costs of long distance telephonecommunication in India and acute short supply of bandwidth, VoIP can be anattractive alternative for India. Thanks largely to regulatory hurdles and ageneric resistance to new technology applications in official circles, it maystill take some time before Indians get to taste the luxuries of packet-basedtelephony. "It is unfair that people in a developing country like Indiawith far lower per capita income than the developed countries should be burdenedwith enormously high communication costs," says a senior officialassociated with an international voice carrier.

However, of late things have started moving positively inthat direction. While the DoT has already made a beginning with its pilotprojects in some cities, the new private Domestic Long Distance (DLD) playerswould be setting up businesses completely based on packet telephony. As forinternational calls, VSNL is not expected to allow VoIP at least till 2002 whenits monopoly ends. Its competitors are unlikely to settle for anything lesscost-effective and efficient than packet telephony.

While it is illegal for ISPs to offer VoIP services, they areconvinced that the Government might open up in the coming months. So strong istheir conviction that many of them have already got their networks ready forcarrying toll quality voice traffic. "We have already started preparing forit. As DoT has also floated the tender for setting up VoIP infrastructure, weshould also prepare ourselves for VoIP-based telephony," says AK Data,managing director, Data Infosys, a Jaipur-based ISP.

However, it is the corporates that have been speedilyrealizing and also reaping the benefits of VoIP. For them VoIP entails a numberof benefits in terms of better infrastructure, cost-effectiveness, andmaintenance. This is largely true of enterprises with multi-location offices."As there is better bandwidth utilization with VoIP, there is less strainon resources. Costly leased-lines are giving way to Virtual Private Networks(IP-based) because of the benefits of reliability, manageability andscalability," points out Ramana. He adds that corporates are showing greatinterest in IP-based PBXs. Dreymann too expects Indian corporations to embraceVoIP very quickly for their Virtual Private Networks and save tremendous costson internal communications.

He believes that beyond the globally applicable benefits suchas a lower cost of ownership and the ability to provide value-added services,India would particularly benefit from VoIP as the existing telephoneinfrastructure falls short of the current and near-future needs. "It isquestionable whether investing into upgrading the infrastructure by burying morecopper and more fibre into the ground makes sense when one could, alternatively,carry 10 times as many phone conversations without such investment just by usingVoIP. This is especially true when you bear in mind the geographical distancesbetween cities in India," he adds.

Ravi Shekhar Pandey