 | Issue: | Asia-Pacific I 2007 |
| Article no.: | 6 | |
| Topic: | IP, carrying the world’s carriers | |
| Author: | Anatoly Korsakov | |
| Title: | Vice-President, Sales | |
| Organisation: | MERA Systems | |
| PDF size: | 312KB |
About author
Anatoly Korsakov is the Vice President of Sales at MERA Systems. He oversees the company’s sales force and supervises the development of the global distribution network for MERA’s VoIP portfolio. Prior to joining MERA, Mr Korsakov was Account Manager and Sales Team Leader for Ericsson Russia. His previous experience also includes serving as the Chief Marketing Officer for a major regional GSM carrier in Russia. Anatoly Korsakov holds an MS degree in Radio Engineering.
Article abstract
Internet protocol, IP, networks are destroying the traditional telephone service operating company business models. IP networks are cheaper to build and run. They allow operators to consolidate voice, data and video traffic on the same network and provide a broad range of new applications and services. Operating companies have watched cable companies, which they felt would be their chief competition, but have let Internet service providers – such as Skype, Google and Yahoo – establish themselves as communication providers and become dangerous competitors.
Full Article
The telecom landscape has changed dramatically in the past years. VoIP is a revolutionary technology that has the power to change the world’s communications completely and open a new range of communication services, including voice and multimedia calling, fax and data transition. VoIP has come a long way since the late ’90s and has reshuffled the competitive relationship between existing and emerging carriers. The popularity of VoIP is accounted for by the expanded opportunities it offers both to carriers and customers. Compared to legacy telephony services, VoIP offers greater flexibility, more attractive prices and extra calling features, and call management functions that, unlike those provided by traditional telephony operators, come free of charge. After years of hyperbole, VoIP made its way out from serving the technicians to a widely used consumer service. Telcos clearly see their future, and it is about VoIP services. This technology enables them to roll out high-speed multimedia services to consumers and businesses faster, and at lower cost, than traditional PSTN, public switched telephony network, services. As those benefits are alluring, the carriers are struggling to put the infrastructure needed to support VoIP in place. Chances are good that the operators will eventually replace the majority of circuit-switched networks with IP networks because they make better use of available resources. Enterprises that turn to VoIP and are pleased with the experience are where IP telephony unites remote locations and home offices through a single converged network. For many companies, perhaps most, the functional benefits of an IP-enabled network significantly outweigh the accompanying pain of transition. For others, the pull of migration to an IP infrastructure is simply a matter of reducing costs – it brings essential cost savings, eliminating much of the expense of widely dispersed inter-office communications systems. Then, too, there are operational efficiencies brought by centralized network management – a single technician can often add or drop users and deploy a variety of new features. As we move further, it becomes quite apparent that IP networks will be the default networks for all types of communications. CAPEX, capital expense, and OPEX, operating expense, savings and the ability to offer new services are the strongest drivers impelling legacy carriers to modernize their networks and switch to an all-IP infrastructure – those who haven’t switched yet are planning to in the near future. Complete migration from legacy to next-generation networks will take carriers and service providers from three to five years on average. The IP niche has a wealth of greenfield opportunities for newcomers – market analysts predict VoIP market growth of up to US$857.8 million in 2009. This will be due to dramatic growth in the use of VoIP by both individual end-users and the corporate sector. This growth will take place despite the competition from entrenched service providers and a long series of hurdles, including the diversity of regulatory environments. There are no universal regulations for licensing VoIP carriers; some countries even ban IP telephony completely, and others have a state monopoly on VoIP services, hampering competition and making it too expensive for extensive use. One also sees a wide variation in infrastructure development from market to market. To call VoIP a threat to PSTN phone services would seem to be stating the obvious. Still, far-fetched as it may seem, telcos have focused most of their efforts on competing with cable carriers – which also pose an obvious threat to their business – but have let Internet players like Skype, Google, Yahoo and the like establish themselves as communication providers and perilous rivals. Due to their own shortsightedness, telcos now have to face a very complicated competitive landscape. Throughout the world, hundreds of emerging VoIP carriers are rolling out their services each day and, to win customers, they are drastically undercutting the prices of the incumbent carriers. Dropping profit margins and increased competition are forcing carriers and service providers to review their marketing and product strategy. The most perceptive operators are starting to back away from their wholesale offerings and beginning to offer a broader product range in order to generate a diversified revenue stream. Telcos have long focused on competition from the cable companies, which they believe poses a more obvious threat to their core business, and many people still do not consider Internet players a true threat to the telcos despite their proven ability to acquire millions of users with minimal advertising expenditures. The market is extremely competitive and emerging providers offer VoIP services as part of a bigger service bundle. To catch the customer’s attention, carriers have to come up with value-added services and have worked to ensure that all the features and benefits of wired IP phones are available on mobile ones. The ultimate deterrents, on the way to truly all-embracing IP communications, are the number of existing broadband connections and the shortcomings of such high-speed wireless technologies as GPRS. Let’s face it – the bottom line is that consumers do not care about VoIP or technology in general – they care about value, quality and ease of use combined with attractive pricing. As long as a service provider delivers those, the underlying technology matters little, if at all. So it has become particularly important for VoIP carriers to offer improved quality and customer service; consumers are often suspicious of IP telephony quality and are more likely to return to a PSTN carrier if they feel their needs are not satisfied. Most VoIP carriers focus on building up their customer base and try to figure out how to turn a profit as the market evolves. Still, there is little doubt that IP is becoming the favoured method for delivering complex network services. However, IP technologies – and VoIP services – are now bringing disruptive changes to the telecom industry. Carriers today are increasingly faced with the challenge of making VoIP and traditional TDM, time-division multiplexing, networks work together while steadily and rapidly deploying additional capabilities. Carriers find VoIP appealing because it runs on a data foundation so it can be easily bundled with other services, such as broadband Internet access or video communications, but such benefits come at a price. A carrier’s NGN, next-generation network, migration strategy is influenced by such factors as the available investment funds, technology, regulatory policies, pricing trends and competition. In order for VoIP usage to overtake legacy telephony usage, IP networks must become as reliable as the PSTN networks are today. Deploying a VoIP service can be a relatively easy task for the majority of carriers but maintaining and monitoring the service presents quite a challenge, so each carrier needs to develop a unique migration strategy. If VoIP networks do not become as reliable as the PSTN networks, they will rapidly lose customers. With such an essential service as telephony, businesses and individuals will not tolerate outages for any reason. In the new IP-based world of communications, technical expertise is vital to the successful management of a VoIP-intensive environment. There are two different ways to achieve reliability, equipment redundancy and network interconnection redundancy – both of which are needed to guarantee reliable VoIP networks. Naturally enough, there are still many technical issues to deal with if VoIP is to become all-embracing, such as leveraging the existing infrastructure and interoperability. Much depends on favourable legal regulations and the rate of market development. Shifting to an all-IP world will be a most remarkable experience.
