VOIP, NOW A MAJOR ISSUE WITH TELECOM CARRIERS

Dionisia Tabureguci

Depending who you’re talking to, Voice-Over-Internet Protocol (VoIP) can be a tricky subject.

Among those who would prefer not to talk about it would be the incumbent telecommunication carriers in the Pacific islands countries for obvious reasons: VoIP service providers are a direct threat to their core business by providing telephone calls via the Internet at very, very cheap rates.

A number of telecom companies in the Pacific were born out of and continue to exist under old legislations that did not foresee any threat in the development of communications technologies.

Today, while any talk of VoIP is almost a taboo subject for them, there have been indications the new trend is not something they are taking lightly as they used to. It would do them some good if they gave it serious consideration.

For it is the advent of the Internet and the protocol which enables it - better known as Internet Protocol or IP (IP being the TCP-IP Internet Standard, explains one technical guru) - which is driving this revolution.

And by the looks of things in the global telecommunications industry, the Internet is here to stay.

Not only that, the Internet is also cutting down to size huge telecommunication corporations in major markets that, like their counterparts in the Pacific, refuse to give merit to the ability of this new medium to slash figures in their bottom lines.

Last year, during the visit of Vinton Cerf to the Internet Society’s Pacific Chapter, we heard from Cerf of an industry future driven by a seamless integration of voice, video and data, projecting to us the possibility of an emerging new society that will function on Internet dependence.

As a co-creator of the basic architecture of the Internet and now involved in work that concerns further evolution of this mode of communication, Cerf’s advice to telecommunication companies in the region still stuck in the old model was: “if somebody is going to eat your lunch, it may as well be you.”

In other words, for companies that operate in countries that have made it a national decision to embrace changes Internet brings, it would be wise to be the first to jump on the bandwagon, explore the possibilities and provide products to customers instead of going to great lengths to try and protect themselves, only to leave gaps open for someone else to come in and provide the service first.

And there are signs that these companies agree with this statement, although they would rather that things happen at a pace that takes into account the reality of providing telecommunication services in the region, the region being infamous for its difficult inter-island and intra-island geography.

A notable example of their recognition is the 2006-2007 work programme for the Pacific Islands Telecommunications Association (PITA) presented to members at its 10th annual general meeting in Brisbane two months ago, which includes among its priority areas the transition to and impacts of the Next Generation Networks (NGN).

PITA is an organisation of 101 members, 40 of which are telecommunication carriers and operators from 22 Pacific Islands, along with seven independent regulatory bodies in the telecommunication industry.

It foresees the move by incumbent carriers to NGN as inevitable.

An NGN network is one that seamlessly blends the public switched telephone network (PSTN) and the public switched data network (PSDN) to create a single multi-service network. So far, Fiji’s domestic carrier, Telecom Fiji Ltd is one company that has already advertised for partners to assist it in this move. And according to those in the know the company is in the process of choosing the winning bid.

“The issue is that even though certain markets are now open to competition, the competition is coming from technology,” explained PITA president, Maui Sanford, in an interview with ISLANDS BUSINESS on the impact of VoIP on telecom companies in the region.

“People have started to use VoIP and the more you have broadband, the more people use it. Therefore, the incumbent carrier is really impacted heavily in the revenue aspect, especially for those providing traditional telephony.

“We are facing that right now in French Polynesia and also in New Caledonia, where broadband has been implemented. I know that Fiji has also started on broadband. Many of us will have to reduce our costs and find new ways of getting revenues just to stay viable.”

The talk about VoIP therefore is only part of a bigger need for companies in the region to take on the new dynamics of the industry.

The important thing to note, as Cerf commented, was that in the packet-switching world of IP-based networks, potential revenue sources for network owners were not limited to carrying voice alone but video as well.

This opens up new ways not just for new revenue sources like IP telephony (VoIP), but also things like radio and television services over the Internet, or even the now popular podcasting.

“The Internet has allowed us to combine what had been very distinct and separate services into a single thing,” Cerf said.

“The sharing of all the (bandwidth) capacity through these different services reduces the absolute cost because instead of having to pay for television, telephony and data services separately, you end up aggregating all the (bandwidth) requirement and then dynamically sharing your capacity among these different needs.

“When you aggregate, you get better utility from the underlying infrastructure because you don’t have to keep buying stuff separately and dedicating it and therefore not using it as efficiently.”

So where does that leave telecom companies in the region? Especially in countries where broadband access is available and where consumers are going to town with online VoIP services like Skype, Verizon and Googletalk?

That, it seems, opens the can for a host of other issues that may be summed up into a pertinent question: If telecom companies in the region evolve to become just IP network providers and content managers as PITA believes they would, who then would be responsible for the provision of basic telecommunication services to the rural areas and outlying islands in the region?