WASHINGTON, April 29 (UPI) -- New voice over Internet protocol providers are going online at a rapid rate -- numbering more than 1,100 as of April -- and are challenging broadband networks.
A study released this week by broadband equipment maker Sandvine Inc. of Waterloo, Ontario, found VoIP "is in the midst of a major marketplace expansion as a myriad of players, from major brand telephone and cable companies to independent operators, 'Mom and Pop' local services and free Internet telephone application developers ... all attempt to cash in on the craze."
VoIP employs the Internet to convert voice and fax calls into a stream of data. Transmitted over the Net in a flow of digital packets, VOIP has been finding great success because of its relatively good quality and low prices compared to the circuit-switched voice networks used by all the major telephone carriers.
Sandvine's report also said the rapidly expanding VoIP business poses serious challenges to broadband service providers that carry VoIP traffic on their networks. Voice traffic has unique technical requirements that demand more rigorous and flexible traffic-handling techniques.
"Broadband providers can enhance a user's online experience by prioritizing or reserving bandwidth for latency-sensitive (sensitive to delays) and interactive applications like VoIP," Dave Caputo, Sandvine's co-founder, president and chief executive officer, said in a statement. "For service providers looking to roll out new VoIP services of their own, it is imperative that they understand how many minutes are already being consumed by their broadband subscribers."
Caputo said the battle for market share among all these offerings will be fought on the field of quality of experience or QoE, "a measure of end-to-end performance that combines reliability, standard quality of service metrics and subjective end-user experiences."
Sandvine's report said the failure or success of VoIP providers will depend "on the level of QoE that a service provider can achieve and sustain, so network managers must determine very quickly how QoE can best be quantified and ensured."
Caputo told United Press International: "The popularity of VoIP and its growing adoption in the household puts more pressure on ISPs. Residential users will expect the same level of quality as they would from their current fixed-line telephone service, so service providers have to take extra steps to handle the unique requirements of VoIP data traffic."
He added: "These steps include identifying VoIP traffic on their network and protecting it from competing applications and threats like worm traffic on the network."
Sandvine arrived at its VoIP figure after analyzing data traffic moving across its global network of ISP customer sites, which it said accounted for more than 20 million broadband subscribers worldwide.
VoIP is being offered by a range of companies, such as upstart Vonage, in Edison, N.J., one of the largest providers of the service, and heavyweight traditional companies AT&T and Verizon, which are rolling out their own VoIP services to stay competitive.
The research firm IDC, of Framingham, Mass., reported earlier this month that residential VoIP continues to increase considerably in popularity in the United States, and the roll-out of VoIP services by the major telecommunications carriers is one indication.
IDC said its forecast is the number of U.S. subscribers to residential VOIP services will grow from 3 million in 2005 to 27 million by the end of 2009.
"Although it has been slow to develop in the United States and elsewhere, VOIP is finally beginning to show its potential in the consumer market," the company said, adding that a great deal of VoIP's recent success is the result of marketing the service on the basis of price.
"VOIP must prove that it is more than just a cheap replacement for POTS (plain old telephone service)," William Stofega, senior analyst in IDC's VOIP services research program, said in a statement. "To do this, carriers will need to offer services that are compelling and affordable. The winners will use the flexibility of IP to design services that differentiate themselves from their competitors."
He added, "However, it is important to remember that the market for VOIP services is still in the very early stages of development and carriers and equipment vendors need to plan for a marathon."
--
T.K. Maloy is UPI's Business Editor. E-mail: [email protected]
