 | Issue: | Latin America I 2001 |
| Article no.: | 4 | |
| Topic: | IP Protocol – Changing the Paradigm | |
| Author: | Fernando Machado Terni | |
| Title: | President-Director (CEO) | |
| Organisation: | Intelig, Brazil | |
| PDF size: | 16KB |
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Article abstract
IP technology is the natural path for all telecommunications companies. In the future, voice traffic and data transmission will travel through the same backbone, all using the Internet Protocol. Calls will travel as data packets through shared communication lines, substantially reducing telephone rates. By 2003, IP telephony will represent approximately 23 percent of the total domestic long-distance telephony traffic and 29 percent of international telephony traffic and, consequently, carrier income will be reduced.
Full Article
With the current scenario of the telecommunications segment in Brazil, it is hard to imagine what tomorrow will bring. In fact, it is pretty complicated to fathom what new technologies may yet come to be. Today, the Internet can be accessed using a mobile phone, conferences are held on PCs, international calls are placed with undeniable speed, in a sense, it is easy to assume that the future is already here. However, there is much more on the way. Assuming a conservative position, we can say that by the end of this decade services such as voice and fax will converge through the use of IP (Internet Protocol) technology. Indeed, IP technology is the natural path for all telecommunications companies. In the future, voice traffic and data transmission will travel through the same backbone, all using the Internet Protocol. Over the next few years, the voice traffic volume on IP will be equal to or greater than the current volume travelling through today’s Fixed Switched Telephone Service. To that traffic we can add that which can be expected from the natural expansion of the telecommunications market regardless of the technology employed. Even 30 months after the privatisation, repressed demand for telecommunications services in Brazil should not be underestimated. All these services will be available through a single channel: the PC. The price for the end user will be attractive. People in different continents will be able to talk without the need to pay international rates. With IP telephony, prices are similar to the price of local calls. The migration to the IP technology is inevitable since it is a worldwide trend. The business possibilities are endless. Since the drop in prices is considered certain, there will logically be a considerable increase in the number of hours used for Internet connections. Fixed telephone carriers could, very well, become Internet service providers. Accordingly, the small and middle-sized companies that are currently responsible for a large part of the telecommunications companies’ income, will probably increase their use of the Internet for general communications. Today, high costs limit the use of the IP technology to major corporations. Market analysts believe there will be a reduction in the portion of the carriers’ income derived from conventional, switched network, telephone service. In 2003, IP telephony will represent approximately 23 percent of the total traffic corresponding to domestic long-distance telephony and 29 percent of international telephony. The companies planning to enter the IP telephone business have a tough road ahead of them. The consumer is still very resistant to using the technology. The majority of the population does not believe in the safety of the Internet and is fearful of using the worldwide web largely for shopping or even paying bills with credit cards, for instance. Pure misconception. When paying a bill at a restaurant, we blindly trust the employee that takes our card far from our view. The risk is there, but for cultural reasons, we do not feel it is that close. According to a study by the IDC (International Data Corporation), the Brazilian market had, in 1997, somewhat more than four million PCs and other devices such as the traditional desktops, laptops and palmtops connected for Internet access. This number includes connections by 54 percent of Brazil’s companies and 22 percent of the institutions associated with the Government and education. These percentages corresponded to 1.1 million Internet users. For 2003, the projection is that Brazil will have over nine million Internet users, using over 11 million PCs and other equipment for access to the Web. That is to say, the users exist and, therefore, so does competition. An important question to be addressed is professional qualification. Those who offer technology must provide specialized technical support. This is only possible if sizeable investments are made in training and, initially, arranging for courses in countries where the knowledge exists. Currently, the market needs a considerable injection of highly qualified professionals. Today, IP telephony provides calls of unacceptable quality. Speech quality tends to degrade when the analogue voice signal is converted into packets that can be transmitted by digital media using the IP protocol, for later conversion at the receiving end, back to analogue format. The result of this conversion process is a loss of quality that is inevitable, at least with most current versions of the technology. There is much to discuss regarding regulations for IP telephony. The National Telecommunications Agency, Anatel, considers IP transmission to be a value-added service. As such it has no obligation to regulate the technology. Under the General Tele-communications Law, value-added services can be provided by companies that are not telecommunications companies. The carriers, however, are seeking specific regulations for IP telephony so the situation will not favour a monopoly or create unfair competition. Conclusion There are other benefits, in addition to the commercial benefits, that IP telephony is bringing to society. One notable social benefit is democratisation of access to education. IP telephony can provide students, no matter where they are located, with relatively inexpensive access to education, training and information from institutions throughout the world. In Brazil, the World Wide Web is expected to become a major force for stimulating youngsters from all classes and regions to grow both intellectually and professionally.
