Transcript Voice over IP (VoIP) Effects on Telecom Industry

Source: www.blondie.com
Voice over IP (VoIP)
Effects on Telecom
Industry
Zahid Irfan
2001-03-0037
What I am going to talk about
Communication Networks
 Internet
 Birth & Development of VoIP
 Effects of VoIP on Telecom Industry
 Telecom Industry’s Response
 Conclusions and Recommendations

Internet’s Birth.. 1971
Source :http://www.cybergeography.org/atlas/historical.html
Internet’s Explosion … 1999
Source :http://mappa.mundi.net/maps/maps_007/
What drives the Internet

The Internet’s backbone.. The protocols
– Token Ring
– User Datagram Protocol (UDP)
– Internet Control Message Protocol (ICMP)
– Transmission Control Protocol/ Internet
Protocol (TCP/IP)
http://oac3.hsc.uth.tmc.edu/staff/snewton/tcp-tutorial/
Why not USE the NET…

The motivation
– The high rates of telephone calls from
Israel to USA. ($2.5/min)

The solution
– Transmission of Voice signals over the net

Emergence of Voice over IP
Voice over IP

Voice over IP (VoIP)
– Conversion of voice signal to stream of
packets and using the Network line to
transmit to destination and then reconvert
it to voice signals
Data and Telephone Network
Source : www.howstuffworks.com
VoIP Network
PSTN
Call Agent Application Servers
Media GW
Source of
Value Added
Services
Signaling GW
IP Network Address Re-solver
ENUM
Clients
•••
Source: www.technet.com
Applications of VoIP
Internet aware devices
 VoIP/PSTN hybrid gateways
 Interoffice trunking over corporate
intranet
 Remote access
 Voice calls from Mobile PCs and mobile
phones

Benefits
Cost Reduction
 Simplification

– same network (easy maintenance)
– optimization of bandwidth
– Fault tolerance

Advanced Applications
– video conferencing
– white-boarding and shared screens
Quality of Service (QoS)
Sharing of available capacity
 Latency of transmission
 Authentication and Encryption(Secure
Telephony
 Reliability of Transport

Growth of VoIP

Estimates of various sources




$500 m to $18.7b in 1999-2004 (106% growth)
-IDC
$270 m to $12.6 b in 1999-2004 - Ovum
30% of international phone traffic will be
carried over data lines in 2002 against 0.2% in
2001 - Probe
$4b to $23b in 2001-2004. - Kagoor
Souce: www.fortune.com
Telecom Industry Losses
Company
Losses
($m)
%
AT&T
~350
3.6%
(KDD Co. Ltd.
(Japan)
Deutsche Telekom
~307
10.4%
~175
4.2%
Telstra Corp.
(Australia)
Embratel (Brazil)
~168
9%
~28
11.5%
Bezeq (Israel)
~30
10.7%
Source:http://www.it.kth.se/voip.html
Telecom Strikes Back
PTCL signs contract with M/s ABS
Corporation (min. profit $36 annually)
 AT&T-Yahoo consortium acquires 37%
of Net2Phone shares
 Indian Government to lift ban on VoIP
in 2002

VoIP without Enhanced
Service Provider Status
Cost per minute (in
Percentage of
Percentage of
$)
Revenues
Cost
0.140
100%
-
Access Charges
(0.050)
(35.75%)
45.5%
Network Operations
(0.015)
(10.7%)
13.6%
Depreciation
(0.010)
(7.1%)
9.1%
(0.035)
(25.0%)
31.8%
Total Cost
(0.0110)
(78.6%)
100.0%
Net Profit
(0.030)
21.45%
-
Average Rate
Sales, General &
Administrative
Source : Merrill Lynch Corporation
Future Developments
Text to voice conversion
 Voice to text conversion
 Voice response systems
 Replacement of Mobile system with IPbased systems

Questions & Answers