Posted: 03/1998

Considering IP Voice

Packetized Service Offers New Alternative for
Telecom Providers

Offering voice services that are carried over packetized,
rather than the more conventional circuit-switched, networks is
becoming a growing new option for network operators and long
distance resellers alike.

Putting voice services over Internet protocol (IP) links
allows carriers such as IDT Corp. to offer low-cost domestic and
international phone services because–unlike standard voice
networks–packet network operators don’t have to pay high tariffs
for an incumbent carrier to terminate their traffic. Handling
voice on data networks also can be less expensive because it can
be compressed and ride along with other traffic, rather than
occupying set time slots on the network. IDT just this year began
offering its Net2Phone Direct phone-to-phone Internet telephony
services to consumers and small businesses for 5 cents per minute
from New York City and Chicago to any telephone in the United
States. The service is available in other cities for 8 cents per
minute.

With an Internet gateway–the equipment that converts analog
voice to data (packets) and owned or leased packet-based
transmission facilities– anybody can offer similar services. And
because companies such as ITXC Corp., which provides peering and
settlements between different IP gateway owners, exist, a
provider doesn’t have to have a ubiquitous network of gateways to
offer widespread services.

Like standard long distance resale, however, offering IP voice
services doesn’t necessarily require the service provider to
purchase and operate equipment. But an existing base of customers
and a heavily trafficked web site doesn’t hurt.

Long distance service providers can resell the services from
IP voice network operators such as Networks Telephony Corp. and
VIP Calling Inc., among others. Resellers and other providers can
cut agreements to direct their customers to the web sites of
these ‘next generation telcos’ to sign up for service. At the
site, customers provide credit card and other information to
receive codes to punch in before dialing their called party.
Those codes instruct the public switched telephone network to
direct the call to a point of presence in the network, where the
call is then converted to digital to go over a low-cost packet
link. The service provider that directs customers to the site to
sign up for the service can get a cut of the proceeds from those
calls.

If all this sounds enticing and you want to learn more about
IP voice, take a look at the Sounding Board insert beginning on
page 59. And if that whets your interest, fill out the
subscription card in the insert to receive a monthly subscription
to Sounding Board, which will launch as a stand-alone publication
in May.

The new magazine will be dedicated to covering the migration
of voice and fax services onto packetized networks including the
Internet, carrier IP networks dedicated to voice and intranets as
well as frame relay and asynchronous transfer mode networks.

Until next time,
Paula Bernier
Editor-in-Chief