The choice of voice

Voice over IP has been 'the next big thing' for a long time, but still faces a number of hurdles before it can be widely adopted.

Selling an application such as Voice over Internet Protocol (VoIP) is often riddled with problems, but can ultimately offer riches.

The rejection of VoIP by the 2002 Commonwealth Games Committee damaged the technology's reputation and reinforced the belief that VoIP could be a liability in terms of service quality.

While VoIP fans will no doubt be seething at such public chastising of the technology, there will be a lot of 'I thought so' attitudes around.

While VoIP has its advantages, it is perhaps wrongly perceived as a replacement technology for public switched telephone network (PSTN) telephony services and there, perhaps, lies its biggest problem.

Mud sticks, and VoIP has suffered from a fair amount of mud slinging regarding quality of service (QoS), especially when compared with traditional telephony. Rightly or wrongly, this is an issue that VoIP vendors have to address.

It also has a definition problem. Is VoIP the same as IP telephony, for example? The corporate image of the technology is confused. Is VoIP about cost savings or does it also have feature benefits?

For its part, Oftel has tried to address some initial concerns and questions that potential providers may have about VoIP.

Regulator's guidelines

Oftel has published some guidelines on VoIP as a direct response to "the increasing number of enquiries from service providers interested in providing internet-based telephony services", according to David Edmonds, director general of the telecoms watchdog.

The guidelines, published on the Oftel website, cover a range of issues including definitions, licensing and interconnection.

According to Edmonds, the guidelines are necessary to clarify Oftel's stance on VoIP and to provide assurances to potential service providers that VoIP is not currently entangled in telecoms red tape.

The guidelines are generally welcomed by VoIP vendors, but there is still a fear that Oftel could impose regulations and kill off the market.

While Oftel has so far considered VoIP to be beyond the kind of regulation to which PSTN providers have become accustomed, it has indicated that the technology is not beyond its jurisdiction, and that, if it becomes a viable alternative to PSTN services, then it will have to abide by PSTN rules.

Blake's heaven

At the moment at least, VoIP is a complementary product to traditional PSTN services. John Blake, BT Ignite's head of VoIP, describes it as "a multimedia and voice and data convergence product, not a substitute for the PSTN".

He added that, while this is a niche product compared with more traditional telephony services, "voice is the lowest common denominator". This means that for resellers looking to sell VoIP products, voice skills are not the number-one concern. It also means that, for the moment at least, it is of less regulatory concern to Oftel.

"As VoIP market penetration increases then Oftel will undoubtedly look at it again, and may view it differently," said Blake.

This is an important point for IT resellers. Without regulation, VoIP is a much easier product to sell and support. It is not measured by the mean opinion score - a common measure for the voice quality of a call - and Oftel has no immediate intention of imposing QoS requirements on VoIP.

While, on the one hand, this may seem like good news to new market entrants, trying to dismiss QoS as an issue does nothing to help the VoIP vendors' cause.

"QoS is not an issue with VoIP products, at least not ours," said a defiant Dilip Mistry, managing director of MultiTech. "The quality issue is to do with the network itself.

"If you are trying to add voice to an already congested network, then of course you are going to have problems with quality. A lot of these problems are unfairly put at the door of VoIP, rather than the network on which it is running."

Oftel's Network Interoperability Consultative Committee, as well as being a technical advisory committee to Edmonds, also produces consensus standards and specifications for interconnection and related interoperability issues.

Close scrutiny

According to Oftel, it will also keep a close eye on the implications of VoIP technology on end-to-end quality in the public telephone network. So, while VoIP is not yet shackled by red tape, it is being closely scrutinised.

In practice, this means that the boundaries for growth are less restricting, although Oftel implies that this is currently a trade-off. If a company wants cheaper calls, and is prepared to suffer potential network congestion which may affect its voice quality, then that is the company's choice.

In reality, it is not quite that crude. VoIP vendors have realised that there is a gulf in understanding in the channel. Voice dealers have been quick to recognise the importance of applications such as VoIP, but generally lack the Microsoft- or Novell-based networking skills which the technology requires.

IT resellers on the other hand have the IT skills but are not recognising the VoIP opportunity, and are generally averse to anything resembling a PBX.

However, voice dealers are adapting quickly. Voice dealer ttml, also an Avaya and Alcatel partner, has already emphasised the importance of shifting its business model.

"We need to be a data centric organisation because that is the way the market is going," explained Greg Young, managing director at ttml.

"We need to look at networking and data integration skills. The voice channel is changing, and will ultimately become more dynamic as a result of convergence technologies. It is an opportunity for us."

Young admits that collaboration with other dealers and service companies is key to a successful future, but he is confident in his own company's ability to compete for business in the UK and across Europe.

His confidence seems well founded, and suggests that voice dealers are in a much better position than IT resellers to take advantage of the VoIP opportunity.

"We have found that voice dealers have been quicker to understand and take up our VoIP products," said Mistry. "Data resellers seem to be afraid of touching a PBX, even though it is not really a prerequisite for VoIP."

Combined solutions

Mistry believes that the problem for data resellers is that companies are looking for a mixed telephony solution, incorporating VoIP applications alongside IP-enabled PBXs. While the idea of handling a PBX may be alien to IT resellers, the thought does highlight the need for increased collaboration.

There is an opportunity here, and IT resellers have the lions' share of the skills needed to fulfil the need.

It is a view supported by Mark Smith, network consultant at 3Com. "Early experience has shown that voice dealers are better placed to sell VoIP products because they are used to the difference in sales cycles between telephony and IT, and are also used to the 'per seat service'," he explained. "However, we are seeing signs that data resellers are catching on."

Companies want to take advantage of IP-based telephony, but their fear that it is still too early to rely fully on it has led to a growth in IP PBX products.

These are a sort of halfway house, where firms can have their traditional telephony but with an IP option, so that they can take advantage of applications such as VoIP.

However, research firm Frost & Sullivan warns that VoIP growth will not be as rapid as some have predicted.

"VoIP traffic is increasing but, even by 2005, it is likely that time division multiplexing [TDM] traffic will still account for the lion's share of the voice market," said Niamh Spillane, a research analyst at Frost & Sullivan.

"That said, the European PBX market is decreasing at a rate of about 10 to 15 per cent each year. The crossover point, at which IP voice traffic and TDM traffic account for an equal amount of the overall voice market, was expected to be reached between 2004 and 2005, but it will probably be 2006 to 2007."

Beneath the surface

High-profile incidents with VoIP, such as the decision of the Commonwealth Games Committee, do not help the technology's cause, but not everything is as it seems on the surface.

The Committee actually blamed a lack of testing time for not pursuing its interest in VoIP, maintaining that without testing it represented too big a risk.

Another setback was that initial telecoms provider Atlantic Telecom went into receivership last autumn, so a rethink in the approach to its communications systems was inevitable.

There simply was not time to implement VoIP with a new provider, so it chose the traditional option instead.

But the use of converged networks is increasing, supporting Young's initial claim that companies are looking for a mix of traditional and IP-based services.

For example, Alcatel has just struck a deal with the National Audit Office for its OmniPCX 4400 IP-based convergence system. The bottom line is that firms are interested in convergence products and applications such as VoIP, so the establishment of VoIP and IP telephony in general is a matter of 'when', not 'if'.

Marc Nackaerts, portfolio manager for Ericsson Enterprise in western Europe, claimed that VoIP technology will continue to develop, with opportunities emerging throughout the rest of this year and beyond. Cost and compatibility with local and wide area networks are the key drivers, he said.

"IP offers a less expensive way of communication for home workers, enabling them to dial into a remote-access server to consults their mails, while at the same time making a phone call to any person within the company," explained Nackaerts.

"This avoids the need for a second line, ISDN or GSM phone to make calls while reading mails, offering significant savings.

"For disparate workgroups needing access to the phone and the corporate network, IP removes the need to install a separate switch allowing them to do this.

"Using the existing local area network infrastructure, they can connect an IP telephone set to make and receive calls. This avoids maintenance costs and the need for technical support for the voice infrastructure."

Cost reductions

Given that VoIP can significantly reduce costs, something most companies are looking to do, it is a little baffling that VoIP has not yet taken off.

Networking vendor 3Com has made efforts in the US to provide more resources to help resellers to build up their proficiency in IP telephony by adding 10 voice specialists to its sales team. The firm said that it is considering this as a future option for its UK resellers.

Oftel's decision to impart its wisdom on the subject may help, although it seems that the industry is expecting much more from the regulator.

According to Blake, Oftel's guidelines could be viewed as an entry point to IP-based telephony, which may suit voice and data dealers looking to expand into convergence technologies.

"The guidelines are beneficial to dealers looking for opportunities in this space," he said. "They won't help us sell the products but are a useful reference for new entrants to this market."

Smith believes that the guidelines are "woolly" and a "knee-jerk reaction to public demand", but added that it shows that VoIP is now being taken seriously in the UK. For vendors, this has to be a good thing. Anything that helps to clarify a 'new' technology and position it within a market has to be beneficial.

The future for VoIP looks very rosy and both data and voice resellers will benefit. It is also a good sign when major players such as Alcatel and Mitel Networks have forgone their direct sales approach to embrace the channel.

SUMMARY

• VoIP is a huge opportunity, but has a tarnished image regarding quality of service.
• Oftel has issued industry guidelines in response to demands that it regulates VoIP.
• The guidelines are limited and have done little to ease fears that Oftel will impose regulations on VoIP in the future.
• Vendors are split over the best route to market, with voice and data resellers both offering relevant skills.

CONTACTS

3Com (01442) 438 000
www.3com.co.uk

Alcatel (01633) 413 666
www.alcatel.co.uk

BT Ignite (020) 7469 2800
www.btignite.com/uk

Ericsson (0032) 2745 1211
www.ericsson.com/enterprise

Mitel Networks (01291) 430 000
www.mitel.com

Oftel (020) 7634 8700
www.oftel.org

ttml (01235) 829 200
www.ttml.co.uk