For the next two years, people will continue to purchase VoIP primarily for cost savings rather than for advanced feature sets, predicted Tom Evslin, Chairman and CEO of ITXC, in a keynote at the Spring VON conference in Santa Clara, California. To be really useful, advanced features require deployments at both ends of the call. Evslin figures that once penetration rates reach somewhere around 15% an inflection point will occur and people will start to buy VoIP in order to have the same advanced features as the early adopters.
In the mean time, momentum continues to build. Evslin presented a “Top 7” List of indicators that VoIP is hot again.
- Jeff Pulver owns the VON show again
- The stock prices of VoIP companies now have digits before the decimal
- People at cocktail parties talk about Internet telephony
- Industry consolidation is happening and will pick up pace
- AT&T and MCI have joined the VON Coalition
- The industry has gone from building networks to joining networks — interconnecting VoIP networks is now the most pressing industry issue
- Government wants to tax VoIP — Regulators want to regulate it
A few years ago, Evslin predicted that by 2010 all calls would travel over IP for a portion of their route. Now, he says, this time frame “may be too pessimistic.”
Evslin’s presentation highlighted a number of industry pain points. “We don’t really have plug-and-play interoperability between networks,” he said, ” even when both networks are using equipment from the same vendors.” VoIP carriers are also caught in the middle of a protocol conversion from H.323 to SIP. Even when interoperability issues finally shake out, Evslin believes there will be an ongoing need to have a clear demarcation between networks. Routing, billing and security will continue to be issues wherever carriers exchange traffic. And the “n-squared problem” will prevent every carrier from peering and maintaining business relationships with every other carrier, thereby necessitating VoIP Interexchange Carriers, such as ITXC.
Evslin, who is an active participant in the VON Coalition, also argued in favor of a “light regulatory” touch. VoIP providers are not asking for a free ride on somebody else’s network, he said, and traditional telecom regulations are not needed for the new VoIP world. Nevertheless, he believes that current economic forces that are driving VoIP are so strong, the technology could not be killed at this point even by really bad regulatory policy. Any unnecessary regulations, however, “would have high social costs.” The VON Coalition advocates voluntary industry efforts to meet social needs like access for the disabled, access in rural areas, E-911 and CALEA.
- In November 2003, Teleglobe International Holdings announced plans to acquire ITXC, the largest provider of international VoIP wholesale services with direct relationships with carriers in more than 175 countries. Teleglobe has been a major player in international telecommunications for well over 50 years and ranks among the top five providers of international wholesale voice, data, IP and mobile roaming services. Teleglobe’s network reaches more than 240 countries and territories and is physically interconnected to approximately 275 fixed-line telecommunications operators and 360 mobile operators. After the merger, Teleglobe will be one of the top three international voice carriers. The company hopes to improve operational efficiency by the application of ITXC’s automated technology to Teleglobe’s older back-office processes.
- For 2003, ITXC carried approximately 4.1 billion minutes of Internet telephony traffic versus approximately 3.1 billion minutes for 2002.