Hearing is believing: Applications, not cost, will drive IP voice market

Listening to executives at last week's Carrier IP Telephony forum, one might think the issue of quality never existed for voice over the Internet. In fact, according to several speakers at the event, which was offered as part of the International Engineering Consortium's National Communications Forum in Chicago, Internet protocol networks will be able to provide voice quality that is better than the public network. The key will be to tap into the bandwidth and flexibility that IP networks can offer.

"Five years from now, people will complain about the lousy quality of the public network," said Dominique Linden, product marketing manager for Dialogic.

In the meantime, though, carriers will enter the market looking for either cost savings or applications that will use more than just voice communications. The former group, which includes most incumbent carriers, will shift some of their transmission to IP-based networks because quality issues such as latency and dropped cells can be solved largely by leasing capacity on private networks.

Some of that movement already is happening, said Elon Ganor, chairman and CEO of VocalTec Communications, an IP voice gateway vendor that now generates more than half of its revenue from incumbents.

"We don't believe in revolution; we believe in graceful evolution," he said.

Most of the larger incumbents already are quietly testing IP voice, although few have yet to publicly acknowledge it. GTE, one of the few to announce its entry in the market, will roll out a fax-to-fax service in the fourth quarter and move into the voice market in early 1999. The company is rolling out service slightly slower than most small operators because of voice quality concerns.

"I don't feel a Fortune 1000 is going to allow GTE to outsource any telecommunications application that is lower in quality that what they get today," said Chris Brickler, director of enhanced Internet service for GTE. "IP fax also is a great way for us to get into long-distance."

Other incumbents are "looking to gatekeepers to leverage the advantage of their imbedded operations support systems," said Joe Mele, president of Lucent Technologies' elemedia venture.

New carriers, however, will have to rely on unique applications before quality issues disappear. Though still in its infancy, IP voice likely will spawn applications that combine voice with data collaboration or even video.

"By delivering valuable benefits on top of dial tone, we can deliver services that are valuable today even when all the parts aren't there yet," said Andrew O'Brien, vice president of Brooktrout Technologies.

Mele envisions a future of multiple types of IP devices, including ordinary appliances. The key, he added, is getting developers to write applications to open application program interfaces in gateways and gatekeepers.

Even GTE, which has the advantage of an extensive network, sees the day coming fast when IP voice becomes a commodity and it must offer new applications. "We're making a conscious effort not to base our model on domestic arbitrage," said Brickler.

Telephony continues to beef up its editorial staff with the addition of Hanna Hurley as Intelligence & Software Editor.

In her new role, Hurley will cover software issues affecting carriers, including operations support systems, billing and customer care. In addition, she will cover many issues surrounding Internet service providers and serve as Telephony's editorial presence in Silicon Valley.

Before joining Telephony, Hurley was executive editor of Network magazine where she was responsible for the day-to-day management, including planning, writing and editing editorial content, and implementing the magazine's Web site strategies. Before that, Hurley was managing editor for Printed Circuit Fabrication.

"Having someone with Hanna's experience, particularly her knowledge of ISPs, is going to be a great addition to the staff," said Vince Vittore, New Media Editor.

Hurley received her bachelor's degree in English from Western Kentucky University and has a master's degree in journalism from the University of Mississippi.

Hurley's e-mail address is hanna_hurley@intertec.com.