A dose of reality

The Internet protocol voice market is gaining ground but won't meet the lofty expectations of previous reports unless several issues are resolved.

Speaking at a conference last week sponsored by Lucent Technologies' elemedia group, several industry leaders said that the lack of generally accepted standards and uncertainty over scalability and quality of service (QOS) must be resolved before IP voice carriers make a major impact. Moreover, unless applications are developed around the IP platform, existing operators won't have enough incentive to make big investments.

"Everybody thinks this is a great enabler, but it seems like we're all looking around saying, 'What can we do with this?'" said Siroos Afshar, district manager of AT&T Labs, which is experimenting with several IP voice applications. Before following up its expected growth curve, the industry must agree on a set of protocols-in particular for internal network communications, he added. "There are a tremendous number of implications."

In contrast, local carriers are still more troubled by QOS issues.

"It's the No. 1 issue for us," said Lee Quintanar, head of U S West's advanced technology group, which is working with several vendors on applications and has an Internet call waiting trial in progress through its Internet unit. "It's just not acceptable for a lifeline service to not have [QOS]. We have a number of services that we want to extend to the IP domain."

Among those potential applications are audio conferencing, Web-enabled help desks, Internet messaging and multiparty chat rooms.

In fact, developing new applications should take center stage for vendors and carriers, said Jeff Pulver, founder and CEO of Pulver.com. At best, he said, IP voice, which still largely consists of selling cheap long-distance, will account for significantly less than 10% of the worldwide voice market this year. "This year better be the year of the application. Without applications, the people selling cheap minutes are going out of business."