Voice over Internet Protocol (VoIP) offers proven quality under the right conditions (managed access makes a big difference). It is extremely cost-effective to run and comes with rich unified communications possibilities.

 

So why aren’t we making VoIP calls all the time?

 

It turns out there’s something the operators aren’t telling you: They’re already benefiting from VoIP in their core and transmission networks. They’re just not passing the benefit on to you, because this will eventually kill their established businesses models.

 

Global operators’ VoIP strategy

For two decades, global operators have battled price declines due to market liberalisation, diminishing revenue growth and IP-based competition.

 

Research firm Telegeography further reports that total global voice traffic grew by just 5% in 2012, with traditional TDM-based voice growing less than 3%, making up 66% of total minutes, and VoIP, growing more than 25%, making up the balance.

 

The wholesale market¹ seems to have peaked. Since 2008, carrier-to-carrier traffic grew by 30%, but revenues have languished at $13.2 billion ever since. Retail volume growth and price declines have likewise reached a delicate balance, and revenues may soon fall.

 

Clearly, the industry is in trouble. In a zero-sum game where revenue growth no longer makes up for losses, incumbents are only just surviving with strategies that vary from consolidation deals to shedding low-margin business interests to, tellingly, implementing zero-rated VoIP. “Some carriers are far along in their transition to all-IP networks,” the report notes.

 

This being the case, why aren’t they passing down the benefits to customers? Quite simply, it is because IP will undercut the cost of operating an already crippled business model. Operators are treading water and doing everything in their power to maximise cash flow. New-world models are not in their interest.

 

Local picture

Locally, telcos are equally schizophrenic. On 28 August 2013, ITWeb reported that fixed-line operator Telkom had switched on its all-new IP multimedia Subsystem (IMS) core network, as it migrates to its next-generation network. This follows a June announcement that it had cut over 240 multi-service access nodes.

 

The website reports that Telkom plans to spend more than R10 billion in the next two years on rolling out the all-IP network.

The mobile networks operators, too, have implemented IP at the core

 

Will this lead to IP-based retail offerings, as it should?

 

Recent indications are that Telkom and the MNOs are in no hurry to do so. Packages have been announced whereby they will offer cut-rate calls to one another’s subscribers, which is essentially a billing arrangement and an avoidance of the issue altogether. It is within their power to extend a properly managed IP offering to customers, which would spread the cost savings far wider and not contain them within a captive client base, but they’re not doing it.

 

Again the question must be asked – why not? And again the answer is that it will hasten the crisis that operators find themselves in.

 

Makes no sense

Worldwide, a billion people use MVoIP. It should be several billions more, but resistance from industry players (and market makers) with vested interests is keeping this from happening.

 

Operators are continuing with any number of defensive strategies rather than taking us into a new deal of unfettered, cost-effective communication. And while this serves to artificially prop up their businesses, it makes no market sense whatsoever.

 

¹ International carriers commit to sending each other a certain amount of traffic for price breaks. If the volume traffic is either too low to justify the amount Carrier A is entitled to pay Carrier B in termination charges under the deal, or too high, incurring overflow charges, A must either obtain extra traffic to make up the shortfall, or send its excess traffic via routes that bypass international charges. This trade in traffic is known as the wholesale or carrier-to-carrier market. IPT is the bearer technology of choice, offered in deregulated markets, because it carries no toll charge.

Voice over Internet Protocol (VoIP) offers proven quality under the right conditions (managed access makes a big difference). It is extremely cost-effective to run and comes with rich unified communications possibilities.

 

So why aren’t we making VoIP calls all the time?

Networked-based communications – or Voice over IP (VoIP) – is responsible for a radical overhaul of the role of the business PBX. Previously a mere utility that switched voice calls, today’s IP-PBX offers unprecedented efficiencies, flexibility and functional variety.

 

A constantly expanding universe of communication functions, each suited to a niche requirement that another mode of communication cannot fulfil as well, shows just how diverse and nuanced modern communication is.

 

The mobile phone as a key enabler of the corporate network is a long-standing vision that has become ever more manifest thanks to the acceptance of IP as the bedrock of communications technology. Other signs include the maturation of Wi-Fi as a seamless bearer technology acting in concert with cellular GSM and 3G. The computing power of smartphone technology further demands that mobility be given its rightful place in the enterprise, and myriad applications hasten the completion of that journey. Finally, PBX technology has developed sufficiently to manage mobile phones as part of the corporate communications ecosystem.

 

Soon, industry alliances will coalesce between mobile and converged telcos, offering bespoke FMC benefits that do justice to this confluence of factors – for example opening up least-cost routing and zero-rated options not available before, as well as entire new functional communications vistas.

 

Videoconferencing is acknowledged as a supremely enabling tool, but not many businesses have even considered it, for reasons of its cost. New platforms have however become available that make this technology available to even the most modest sole proprietor. With hosted IP-based video, any business or contractor can now rent virtual videoconferencing rooms at very affordable monthly rates, allowing them to rope in specialists at short notice rather than schedule meetings with multiple people inside and outside the organisation at much cost, delay and inconvenience.

 

Another way in which IP communication has changed the way we do business is instant messaging. IM proves that, while email and voice conversations need never die, they aren’t suited to scenarios where immediacy is vital and a degree of non-disruptive intrusion is palatable.

 

New applications for IM are becoming evident as customers demand a direct interface into the business.  Given a choice, many people would find chat a better option than a voice conversation, especially when busy, or on weekends and public holidays, when it seems an enormous effort to pick up the phone and talk to a support engineer. Chat does not require diverting your attention from your PC, where (let’s face it) it is probably focused. And unlike a voice conversation, it is easier to terminate a chat exchange with the minimum of protocol observed.

 

Chat gives companies the opportunity to delay their response in lower-service level situations, whereas this would lead to a pregnant pause in a live voice chat. But in situations where a higher service level is required, the Jabber protocol (XMMP) can offer a customer service similar to voice IVR systems, which allows businesses to queue their incoming chat overflow and give an estimated waiting time. In turn, this allows the customer to go on doing other small tasks while waiting.

 

IP is a change-enabling architecture for businesses, opening up a world with fewer constraints, more subtle communication nuances, more speed, less complexity and lower cost.

 

And it’s for everyone.

Change to VoIP, or the next rate cut could be your last

 In 2010 Icasa, South Africa's telecoms regulator, announced that call termination rates - the price telcos may charge one another for carrying their calls - would drop each year over the next three years.

By 1 March 2013, the rate will be 40c/minute for mobile calls, 19c for national fixed-line calls, and 12c for local fixed-line calls.

But what will happen beyond 2013? "Recent events suggest that customers of the fixed and mobile networks have reached the end of the line with sustainable price cuts," says , Director of , "and may have to hasten their inevitable move to Voice over IP, following telcos and enterprises the world over."

Voice over Internet Protocol (VoIP) telephony services can provide huge cost savings for any size and type of organisation, sometimes offering a 30 to 50 percent decrease on their total monthly telecommunications bills. But many South African migrations from traditional copper-wire telephone systems to VoIP have been riddled with war stories about negligent service providers, tales of delays, ailing voice quality and sub-standard, yet mission critical services. What caused such sour grapes amongst businesses that have had to tread their path of convergence to more affordable telephony business services?

 

The answer is simple. VoIP as a viable alternative has been oversold by service providers as the voice communications nirvana that offered lower cost with superior quality business services compared to traditional telephony services.

 

ADSL not sufficient

However, using cumbersome Asymmetric Digital Subscriber Line (ADSL) connectivity to lower cost and even with advanced compression technologies to enhance quality had failed to deliver on that promise. Talks of dedicated bandwidth, phased approaches, small scale pilots and migration plans wore thin as those at the coal face of organisations had to deal with quality issues such as lags and downtime.

 

ADSL, while relatively inexpensive, is sufficient for many business critical applications but can’t deliver stable business-grade telephony. Many companies were in fact misguided by so-called communications experts about the limitations of ADSL as the preferred platform for a VoIP solution.

 

While using wires, already in use for telecommunications, is the most common type of connectivity available in South Africa, ADSL has different maximum data transfer rates for uploading and downloading data and as a result, data throughput may vary. In prominent business areas, ADSL exchanges are often oversubscribed and voice quality lowers significantly as overall usage in these areas increases. Sure, it may be cheaper than alternatives such as Diginet and Fibre, but is not stable, and offers at best a “best-effort” service.

 

Consistent quality with Diginet

On the other hand, Diginet, once seen as an expensive, ailing technology offers a dedicated, synchronous data transfer service which provides guaranteed bandwidth from point to point for each line within the organisation. This offers a solid foundation for VoIP and an always on, always available service.

 

As a settled service, Diginet provides the platform for secure, high quality services over a digital transmission network that can be controlled and monitored for quality assurance with service level agreements.

 

While the price of Diginet lines has been a bone of contention and a barrier to entry for companies to upgrade, it is becoming more affordable and adopted in the South African market. The capital outlay is not as astronomical as what warmongers of ADSL VoIP make it out to be. In fact, it is today more affordable than traditional telephony services with the same amount of channels that companies are accustomed to, no matter the size and scope of their organisations.

 

With Diginet, businesses are guaranteed throughput and uptime throughout South Africa and VoIP is then offered for a fixed cost, irrespective of distance. Businesses do not pay for data throughput, but merely a fixed cost for the connectivity and quality of service that can be monitored and reported. I believe that businesses don’t want to be bogged down by the ‘ins and outs’ of the technology. They want to know that it works.

 

In fact, many of our long-term customers have moved beyond the advantages of Diginet infrastructure and are now looking to additional services and functionality that VoIP connectivity allows. Internet Service Providers are able to provide additional value-added services on top of their infrastructures that enhance the productivity of their businesses and improve their bottom line.

 

Conclusion

Diginet as the technology of choice for VoIP is not a hard sell. For customers, the clincher is the bill at the end of the month. Nothing is more convincing than the cost savings in black and white - a stable amount that can be budgeted for to ensure continuous business.

2012 has seen interesting technological advances. Vodacom and MTN have both announced the rollout of 4G as South Africa heads towards full LTE mobile networks, fibre optics are becoming more accessible and consumers have rushed to buy the iPad 3 and iPhone 5. We’ve asked 5 experts to weigh in on which developments will be making waves in 2013:

Although satellite Internet has been available to certain markets for years, there has been an influx of new satellite Internet providers into the South African market place this year.

 

“Satellite Internet can provide amazing opportunities for those in areas without access to Internet, or a viable backup solution, but you have to consider certain things to ensure you get the service you need,” says Jacques Visser, YahClick product manager at Vox Telecom.

 

Ensure you are getting access to Ka-band

Most providers can only give you access to Ku-band or C-band Satellite Internet which is more expensive and exposes you to issues such as atmospheric weakening, problems with low elevation angles and limited coverage.

                          

Ka-band satellites transmit highly focused, overlapping ‘spot beams’; providing coverage over targeted areas, which meansfaster speeds, more reliability, smaller dishes and lower costs for the end user.

 

Ensure the price is right

Providers should be able to offer you a range of packages depending on your needs. If you are a big business who needs uncapped, unshaped Internet access, you need a package with a price tag to match; as is the case if you are small business who only needs to check your mail and use Internet telephony or a home user who only checks mail and uses Facebook. There are high quality, fast, basic packages available for under R200.

 

Ensure you are getting maximum value

Make sure benefits such as unlimited uploads, a Free Zone, built-in speed tests and real-time consumption metres come standard from your supplier.

 

Ensure there are reputable installers & support nearby

Where the installers and support staff are located can affect how long they take to install your hardware or respond to technical problems.

 

You ideally want to know that your suppliers and support staff are in your area and focus on your area, so that you can ensure they are not always out of town and out of reach.

 

Also, confirm that they are reputable and well trained and therefore able to provide you with the quality of support you need without needing to pass you on to different departments and endless managers.

  

Ensure it can support voice

Access to high-quality Internet can provide outlying areas with IP telephony. Areas that currently use party-lines or suffer from high instances of copper theft, can now access reliable connections and communications. Ensure that your provider can give you access to a voice-prioritised channel at a low cost.

 

“Fast, reliable affordable satellite internet is available now,” says Visser. “You just need to know the right questions to ask.”

Voice over IP. What’s left to say? You can save money. Lots of it. It’s great for moves and changes, super easy, even the receptionist can do them. Sure. Tell me something I don’t know. It’s time we moved the hoary old VoIP conversation on a little.

 

How about this: most of what you hear in these conversations about VoIP is smoke and mirrors. Even if it’s not wrong, it’s often also not important.

 

Let’s start with Number 1. By moving your telephone lines to a VoIP system you will save money and be a hero to the company.

 

This is wrong in two ways. Firstly, you might not be able to save money with VoIP indefinitely. You save money if the cost of carrying a call is lower over VoIP. But what if Telkom slashes phone call rates? Whoops!  Moving from a tried-and-tested landline system to the sometimes tricksy VoIP world, for savings that may not materialise?

 

And will you be a hero to the company?  IT directors get a budget to work with. Do they really want to go to the CEO and say, “Hey, we’re saving half a bar a year on voice calls! I can get by on a smaller budget! Do I get the premium parking spot now?”

 

No – if an IT director finds a way to save on costs, wouldn’t he want to take that budget and allocate it to something else on the critical projects list. Show him you can save money, and then give him something clever to do with that cash that will help his company and add real value.

 

The CEO and the FD have heard the cost savings story from VoIP providers before. They like it – cutting costs always rocks their world. But VoIP has been around in mainstream South African business for ten years. They’ve heard the promises. They also know that VoIP can be hard to get 100% right. They’ve had to deal with the fallout of unmet expectations. If they have any sense, they’ll kick the decision on VoIP back to their IT director to ask the hard questions of the vendor – because he’s going to be the one out on a limb if something doesn’t work.

 

So lets stop talking about cost savings. Yes, they’re there. No, they shouldn’t be an all-consuming reason to look at VoIP.

 

For most IT decision makers, VoIP provides no magic bullet that kills some big pain. The IT director is not going to get fired for sticking with the tried-and-tested Telkom. If he manages to successfully implement VoIP across all offices, branches and satellites, he may get a pat on the head, but no ticker-tape parade.

 

So what can he do that will make it worth his while to take the potential risk when it comes to choosing the right partner?

 

How about doing something cool, something hi-tech, and something that will directly impact staff productivity?

 

Rather than looking at VoIP in terms of how it improves the plumbing, rather look at staff habits, work practices and real life interaction, and how VoIP and the new age of digital telephony can improve that. Make no mistake, we are going that route – there’s really cool stuff that can be done with a bit of imagination!

Example: if you move to VoIP, it’s not a big stretch to then do a full integration of cellphone connectivity to the PABX.

 

Almost every exec carries a cellphone. At the office, out the office. We don’t look up a number and dial it if we can help it, we’d rather select a contact and hit “go”. That’s our habit. Work with it. When we can’t find someone at their desk, we call their cell. That’s also our habit. Work with it.

 

Maybe integrate a Closed User Group cellular package with your existing landline infrastructure, where all calls between these cellular and landline extensions are zero-cost. When you call someone within the CUG, from either your cellular phone or normal extension, the call is free. In other words, your cell phone now becomes an inter-branch call like any other extension within the company. There are a few options when it comes to the base cost of the Closed User Group; all depends on the group’s size and package chosen.

 

Cost saving – nice. Doing something cool that helps people get their jobs done more easily? Priceless.

 

Then take it a step further – set up white lists of customers, partners and staff, so that private calls can be billed back to the individual. Black-list problem numbers. Allocate different white and black lists to different staff groups.

 

No staff member needs a mobile phone number on their business cards – calls are rung through from the company PABX to ring on both their landline extensions and cell phones. They choose where to pick up the call.

 

In fact, forget about cellphones and look to tablets. So many execs carry them around – even to the water cooler. Why not run VoIP to tablets through a good, business-quality messaging client that has directory synchronisation with the company contact list? That’s something that’ll impress the top brass.

 

Integrate your VoIP with your CRM and sales force automation systems. Do a bit of thinking about how to reduce information duplication and errors by ensuring that contact information and case files are synchronised.

 

The reality is that VoIP is a commodity technology.

 

Assuming you pick a partner that is technically skilled enough to get it working, and working reliably and consistently (and let’s not forget – VoIP is not trivial to do properly), it’s much of a muchness which system you use.

 

So VoIP vendors should not be sending an IP telephony technician to clients, they should be sending in a Business Analyst to work out how VoIP can be more than a way to get a better voice-minute rate, and then get the engineers working on the solutions. Technology from the top five or six suppliers are pretty similar; it’s the value-added services and integration that counts when choosing who to partner with.

 

The IT director is not so much interested in cost saving projections as in whether the VoIP provider he’s talking to would be a good and reliable business partner. Will you add value to my business and life? Will you be responsive and take ownership of the system you’re making so many promises about? Are you going to implement VoIP in a way that does not make my life harder (like interfering with other network traffic)? Can you come up with good ideas to make VoIP part of a productivity-enhancement package?

 

On the typical IT director’s list of personal priorities, saving a few per cent in call charges is not big. Having more time to do his job is. Getting kudos for doing cool things for the company is.

 

The VoIP solution should be about productivity, time saving, labour saving and lastly about cutting costs.

The argument for using Voice over Internet Protocol (VoIP) as a cost-cutting tool in businesses has long been won. In many instances, VoIP has cut costs in organisations by up to 50%. For others, the experience with VoIP was less than satisfactory – particularly the quality of phone calls. Complaints of delays, interference from non-voice traffic on the network and poor quality of calls are not uncommon or invalid.  But before one dismisses the technology, it’s important to examine both the reasons for these issues and the possible solutions.

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