Combining voice and data in one

We are living in a converging world of new life and business relations, a technological "re-evolution". For us, convergence means that over the last 10 years we have replaced all old analogue systems with new digital ones, and started to use intranet and Internet services on a daily basis. What's next?
Many businesses are looking for new enhanced services combining voice and data together. They are looking for a simple, effective and, of course, cheap solution. Of these new services, the packet-based voice system is the leader because of its flexibility and price efficiency. Demand for voice transport over the Internet (VoIP) is also growing.


Peter Čapkovič

We are living in a converging world of new life and business relations, a technological "re-evolution". For us, convergence means that over the last 10 years we have replaced all old analogue systems with new digital ones, and started to use intranet and Internet services on a daily basis. What's next?

Many businesses are looking for new enhanced services combining voice and data together. They are looking for a simple, effective and, of course, cheap solution. Of these new services, the packet-based voice system is the leader because of its flexibility and price efficiency. Demand for voice transport over the Internet (VoIP) is also growing.

Expectations for voice transported over packet-based networks are big. Measured by revenues, the services are expected to grow from about $1.5 billion to nearly $34 billion by 2004. That would mean an annual growth rate far higher than the 4.6% that Insight Research Corp predicts for traditional circuit-based voice services during this period.

It looks as if we have on one side an old, dying circuit-switched voice world and on the other a new emerging world of packet-switched voice services. Is this true though? In the meantime, many carriers are still investing into traditional networks and first need to resolve technological problems . IP-based voice transmissions still have to face echo, delay and other technical problems. Growing competition and falling prices for telecommunications infrastructure also puts huge pressure on voice call prices.

Prices are still going down, and many service providers are trying to avoid the death spiral of "See how low the price of voice calls can go". They are moving fast to control the service point to the customer's location. All carriers need to move up the value chain to continue to survive in a declining margins business like voice calls. Enhanced services will change this model. The model's underlying strength can be seen in its amazing growth in the face of technological challenges. The falling price for packet-switched-based voice transmission can be successful from a long term perspective only in countries with high prices for voice services and dominant and monopoly voice carriers.

The main advantage of packet-switched voice will come from flexibility. IP-based call centres and voice portals are more than just cheap voice carriageways. This new technology will replace up to three networks - voice, video, data - with one enterprise network. The future is clear - packet-based voice transmission services are a reality, although some of its weaknesses, such as quality, need to be examined. For the moment, we will just have to wait for improving technologies like IP-based PBXs.

Peter Čapkovič is Accounts Manager at Global One Communications s.r.o. Comments and questions can be sent to him at: peter.capkovic@globalone.net

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