VOIP CARRIERS, VENDORS STAND AT THE CROSSROADS

In a world where the vast majority of voice traffic continues to be circuit-switched, it's no surprise that voice over IP continues to find detractors, but the criticism is getting quieter as the number of carriers and vendors promoting VoIP service models grows.

At Supercomm last month, the conference slate was full of sessions designed to guide users through VoIP migrations, including the event's first ever international VoIP deployment conference (see photo) and VoIP market debate hosted by consulting firm Current Analysis. Though familiar comments such as “VoIP is a technology looking for a business model” were tossed about at the Current Analysis soiree, the firm's vice president, Chris Niccoll, said criticism is dying with the emergence of cheaper, more reliable technology.

On the exhibit floor, many carriers and vendors seemed to agree.

“Some people were burned by voice over IP earlier,” said Tony Downes, director of business development at MetaSwitch. “Some carriers and subscribers prefer voice over ATM, but it has more to do with their particular business philosophy than any technology difference.

The first release of MetaSwitch's VP3500 next-generation Class 5 switch had packet voice support, but only for voice over ATM. The latest release also includes VoIP support so that carriers can easily choose between the two.

While he said carrier interest in broadband voice seems to be on the upswing, Downes added that most current service provider deployment is being driven by nontraditional carriers such as private enterprise service providers.

Level 3 Communications, an all-IP carrier fresh off a financial reorganization, is among the public network firms seeing a bright — and more immediate — future for IP voice. “It's ironic, but at the tail end of the broadband buildout for many companies, voice is the one service that is meeting growth expectations,” said Marcio Avillez, director of softswitch services at Level 3.

Beyond straightforward IP voice services, Avillez pointed to growing interest industrywide in the eventual migration to carrier-hosted IP Centrex services. IP Centrex was widely acknowledged as one of the Supercomm hot buttons this year.

Still, Avillez said the migration will be gradual. “Most carriers are trying not to spend capital too freely. IP Centrex investment is starting to take off, but there are only limited applications for it right now,” he said.

Another carrier, Equant, doesn't think there is much that's gradual about the migration to IP voice services — though admittedly it has taken years for the technology to become carrier-grade.

“We looked at IP telephony platforms and systems in 2000, but they weren't ready,” said Michael Burrell, product manager of convergence solutions at Equant. But the international carrier was committed to following through on an eventual migration to packet voice, so it kept a close eye on industry trials and traffic reliability tests such as the ones conducted by independent testing facility Myer.com.

With scalability improving to as many as 10,000 users for some IP PBXs by late last year, Equant began deploying voice over IP in February this year and already has converted 10% of its data VPN customers to the service, offering both a network-hosted or customer-hosted IP PBX.

Burrell said Equant is nearing the third phase of a packet voice evolution: hosted IP Centrex service with IP phones deployed at customer sites. “Right now, we're prepping for the IP Centrex phase,” he said, adding that the carrier is eyeing IP PBXs from several different vendors as well as a variety of IP Centrex applications.

The customer drivers for deploying VoIP are similar to the carrier drivers for using the technology, Burrell said. “They are trying to do more at less cost, but they realize they have to have a future migration path.” He said that international enterprise customers have been aggressive in moving toward VoIP virtual private networks and IP Centrex, but unlike Level 3's Avillez, Burrell thinks big U.S. enterprises customers are also interested.

Jenna Stanley, technical product marketing manager at Nortel Networks, said that without the commitment from enterprise users, carriers probably would not migrate to IP voice services, but the demand from the enterprises is growing.

“Carriers normally don't want to spend or invest if the demand isn't there yet, but for VoIP there is a strong enterprise pull, and if the carriers want that enterprise business right now — and don't want to be losing it — they'll move to an IP services model.”