New investment will be needed to make the most of VOIP opportunities

Following last year`s announcement by the minister of communications that VANS operators will be legally allowed to use voice over IP (VOIP) technology from February, much has been made of the potential benefits to both businesses and consumers. However, realising the full benefits will probably require massive investment in skills, equipment and new systems.

An IP network that carries voice signals as well as data is much easier and cheaper to operate than two separate networks for voice and data: at this basic level, the advantages of moving to VOIP are obvious. But the transition to this single, integrated network holds many pitfalls, and the difficulties should not be underestimated if companies want to maximise their chances of success.

One of the key problems is that users of traditional switched telephony networks have come to expect an extremely high standard of performance. Telephony networks have been specifically designed and built for transmitting high-quality voice signals over long distances without delays or loss. In this they have been extremely effective - but in their use of network resources they are also extraordinarily inefficient. Making a voice call entails monopolising an entire circuit for the duration of the call, during which most of its capacity goes unused.

IP networks, by contrast, have been designed for efficiency, flexibility and robustness. Packet switching delivers all of these - but, in the case of telephony, at the cost of some quality. In the case of an e-mail message, it makes no difference at all if a few data packets are lost en route and need to be retransmitted - the message can still be successfully reassembled at its destination and the user will be none the wiser. In the case of live voice communication, packet loss can very quickly make a conversation unintelligible - and even millisecond delays while lost packets are retransmitted are noticeable and annoying to users, as anyone who`s experienced the lags of satellite transmission can attest.

Fortunately, the technology does exists to overcome all these obstacles - but at a price. There are some hardware solutions on the market, for example, that can distinguish VOIP from ordinary data packets and give them priority. Another solution, much easier to implement on a private network than over the Internet, is to make sure there is enough available bandwidth to ensure low-latency, low-loss traffic.

Using the appropriate technology is not the only challenge, however: successfully implementing VOIP requires a unique skill set that is, so far, in relatively short supply in SA.

Circuit-switched and packet-switched networks represent very different schools of technology. The packet-switched Internet is so successful at what it does partly because it`s a "stupid" network: it simply transmits packets, with all the smart work being done by computers at either end of the transmission`s path. Circuit-switched networks, on the other hand, have a certain amount of intelligence built in. This is why services like call forwarding, voicemail and call waiting work regardless of the kind (or age) of telephone handset you have - a lot of the work is done by the network itself.

Given these fundamental differences, it stands to reason that technicians who are highly skilled at operating one kind of network won`t necessarily know a thing about running the other kind. Moving to IP telephony might mean replacing or re-skilling large numbers of technicians. In either case, there will be associated organisational disruption which must be planned and budgeted for.

Apart from the skills issues, there are also some technical challenges to overcome. Many, if not most, existing corporate networks are not voice capable: getting them to that point will, once again, require planning and investment. Switches and routers may have to be replaced or upgraded, as will desktop equipment, monitoring software and billing systems.

Billing is a particularly interesting and challenging area. Voice calls are currently billed according to the time when they are made, as well as duration and distance. On an IP network, the time a message is sent and the distance it is sent are close to meaningless; the cost to the operator is based on the total bandwidth used. Will operators bill voice separately from data - in which case they will have to find a way of distinguishing one packet from another - or will billing depend on bandwidth use only? It will be interesting to see, in the coming months, how different operators answer these questions.

Desktop equipment is another area where new equipment will probably be needed. There are many people in most companies who don`t have computers on their desks - but all of them have a telephone. Replacing these telephones with IP phones will require substantial new investment, not just in handsets but also, probably, in data and power cabling.

Given all these requirements it`s easy to understand why some people feel installing IP telephony may only be cost-effective for greenfield sites. The fact remains that there are big saving to be made - provided the transition is carefully planned and implemented, by people with the appropriate skills and understanding.