Electronic Design

Voice Over Internet Protocol

VoIP or packet-switched voice has actually been around for several years now with approved standards and good sources of chips. The business rationale has been missing. How do you make money with it when the entrenched telecom carriers are so big and strong?

Now that equipment costs are reasonable, equipment vendors and carriers are beginning to offer VoIP. Small companies like Vonage and Skype started the trend by offering very low-cost "anywhere calling" to subscribers. Next, cable TV companies began offering Internet voice over their high-speed connections. Now those monolithic telecom carriers are beginning to roll it out over their DSL lines.

Big companies and organizations are slowly but surely replacing their traditional phones with VoIP versions, and they're merging their voice and IT departments. With companies like Avaya and Cisco in the lead, expect to see an even faster roll out of this technology, which saves big bucks on telephone calls. It will take longer for VoIP to get to the homes, maybe even decades, because millions of old-fashioned POTS phones are still in use around the country. Furthermore, early adopters of VoIP phones continue to experience glitches with their lines as new voice carriers sort out the various technical problems and figure out how to provide 911 calling service.

VoIP is no longer a technical design problem. ITU standards have been in place for years and tests have proven that it can deliver the quality of service expected by business and private customers. Dozens of semiconductor manufacturers now have chips that make it relatively easy to build Internet phones and carrier equipment. With traditional phone companies continuing to experience a steady annual decline in wireline customers, look for a speedier deployment through aggressive selling. In particular, look for bundled services like VoIP packaged with high-speed Internet service and maybe even video, which is already in the works at some large carriers.

VoIP will also grow as more broadband options become available to subscribers. The forthcoming WiMAX wireless broadband, broadband over power line (BPL), and passive optical networks (PONs) will set off the rush to more VoIP services (see "Alternative Tech Ready To Challenge Cable/DSL Lead," p. 90). It may be that 2005 is the year of the Internet phone.

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