IP Telephony: Ring in the Benefits

With the world becoming flat, communication costs are on the
rise. Enterprises are now spread all over the world, even in very remote
corners, and with the ever-increasing need for constant communication, they are
facing soaring communication costs.

IP telephony or whatever name you call it by (Voice over IP or
VoIP)/Internet telephony, Broadband telephony, Broadband Phone) has become an
affordable alternative for enterprises to keep in touch internally as well as
externally.

According to a Gartner survey, voice and data convergence based
on IP telephony and VoIP will be under way in more than 95% of major enterprises
by 2010. Convergence will drive additional classes of communications-enabled
business applications and cause an upheaval in the telecommunications industry.
The report states that by 2010, 40% of enterprises will have completed the
convergence of all their voice and data networks on to a single network, and
more than 95% of large and midsize enterprises will have started the process. So
what is IP telephony? Wikipedia defines it as the routing of voice conversations
over the Internet or through any other IP-based network.

Why IP?

Indian enterprises are cost conscious and are always looking at finding ways
to better leverage their existing infrastructure investment. Reduction in
communication cost is one major benefit of implementing IP telephony. The
savings come due to the use of a single network to carry both voice and data and
become more pronounced when users have existing under-utilized network capacity,
which they can use for IP telephony without incurring additional costs.

It's not just about cutting costs but also increased
functionality. Mobility is also enhanced with the use of IP telephony as users
can route incoming calls to their VoIP phone whenever they are connected to the
network irrespective of where they are. Also, for India, a major use of IP
telephony is in the call centers. The call center agents can work from anywhere
if they have a fast and secure Internet connection.

According to IDC, IP Telephony is advocated mainly because it
allows new applications to be integrated on the legacy system of the client,
which are otherwise very difficult to implement using traditional telephony at
reasonable cost. VoIP is one such application, which makes it possible to have
an office phone at home with a VPN.

Businesses are looking at VoIP to simplify their networks and
reduce cost of call and operational costs. Moving forward, IP-based solutions
will enable enterprises to deploy different services, which the operators will
be forced to offer in order to beat competition.

"The idea of location-independent services in the network means that an enterprise can use a building-block approach for migrating its communications to IP on a site-by-site, group-by-group, or application-by-application basis" -Ranajoy Punja, VP, Advanced Technology, Cisco Systems

Enterprise Implementation

Enterprises in India are now looking beyond using IP telephony only for
voice calls and are looking at integrating video using video phones in IP
telephony. Birlasoft is one such company. The company has around 450 ports
deployed for IP telephony and has invested around $3,00,000 for implementation.
Says Pushpendu Roy, head, IT, Birlasoft, "We are using IP telephony in
optimizing our existing infrastructure and communication cost in leveraging
convergence technology. Having already implemented IP telephony in our
organization, the next step for us would be to implement Unified Messaging
whereby the voice mails stored on telephone instruments can be made available to
users as e-mails with voice messages as attachments. There are also options to
integrate Video using Video Phones in IP Telephony."

IPT is going to be an integral part in the future roadmap of
Aztecsoft. The company plans to connect all its offices in India as well as
worldwide with IPT. Currently, the company is in the process of implementing
around 250-300 ports as a prototype. Based on the performance and value creation
it plans to further up this number.

Lapp India is also planning to implement it but its GM, IT,
Venugopal C feels that the kind of service provided in India is definitely not
up to the mark: "There is lot of packets loss, which hamper IP telephony in
a major way. Packets loss is a major area, which service providers need to look
into."

Key Verticals

IT and ITeS is one vertical, which started with a bang and is one of IP
telephony's largest vertical segment; next comes BFSI.

As Dinesh Sehgal of Avaya says, "When IP telephony started
four-five years back, the call center industry was being set up, growing mainly
due to the cost arbitrage advantage. It made a lot of sense for people setting
up call centers to deploy IP on their backbone. With more applications being
added, IP telephony is now cutting across all verticals-education,
manufacturing, etc.

"For Cisco, within the enterprise segment, banking and
financial is one of the most important verticals," says Ranajoy Punja, VP,
Advanced Technology, Cisco Systems, adding, "Other important emerging
verticals for Cisco in India include manufacturing, retail, media and
entertainment, healthcare and pharma. These verticals are increasing their IT
spend to achieve competitive differentiation and building global
capabilities."

D-Link is another company, which is pinning its hope on VoIP.
KVSSS. Gunneswara Rao, director, D-Link India says, "One may see VoIP
technology as part of the BPO, ITeS, Service Provider (bulk back haul), and IP
Telephony segments, but VoIP is also dominating in government as well as the
large enterprise space. In all segments together VoIP technology may be giving
an additional yearly turnover of about Rs 1,000 crore, to IT and
telecommunications which is growing."

Is Security a Deterrent?

Since IP telephony uses the existing IP network as its foundation, attacks
on this data network can also adversely affect voice services. One of the most
common threats is a denial-of-service attack, which shuts down an application or
server. These attacks are often made against routers, Web servers and mail
servers-but they can also target call-processing servers in IP telephony
networks.

According to Cisco, security is not a deterrent to adoption of
IP telephony. However, one needs to adopt a holistic approach and network
security concerns need to be considered as IP Telephony can introduce
unauthorized entry points into the network. For this it is imperative that
converged networks enable converged security, which extends beyond traditional
data security policies that address privacy of all the different elements
comprising a network, including the IP Telephony traffic. So the IT architecture
has to design IT security policies for voice and data without affecting the
performance of mission critical applications.

VoIP utilization involving soft phones and software are
vulnerable to worms, viruses and malware. Since these softphone applications run
on user systems like PCs and PDAs, they are exposed and vulnerable to malicious
code attacks in voice applications. Call tampering is also emerging as a threat.

According to Avaya, security is a valid concern because anyone
can spoof into the IP network and get to hear the confidential conversation
going on. Dinesh Sehgal of Avaya said, "Here (security) the role of vendors
like us comes in as we ensure that all the discussions are confidential. We
offer security inbuilt into the phones itself-we offer encryption on all our
models of IP phones."

"We are using IP telephony in optimizing our existing infrastructure and communication cost in leveraging convergence technology" Pushpendu Roy, head, IT, Birlasoft

According to Nortel, security is one of the biggest concerns in
IP telephony deployment. Says Sajan Paul head, Technology & Consulting,
Enterprise Solutions, Nortel India, "However, there are newer protocols
like Secure RTP (sRTP), signaling encryption and voice firewalls to take care of
these issues. Unlike traditional TDM deployment , IP telephony needs a thorough
network planning and disaster recovery design."

Integration Challenges

IP gives the flexibility to an organization to choose its own pace to
migrate and integrate IP Telephony with legacy systems. By integrating with most
major legacy PBXs and voice-mail systems, as well as mission-critical business
applications, most leading IP players empower customers to migrate based on
their business needs instead of technology limitations.

Punja says, "Additionally, the idea of location-independent
services in the network means that an enterprise can use a building-block
approach for migrating its communications to IP on a site-by-site,
group-by-group, or application-by-application basis. In fact, 99% of Cisco's
customers migrate their networks to IP Communications using this approach."

Successful customer migration to IP communications is as much
about process as it is about technology. Understanding this, leading industry
players have developed detailed plans and processes that make migration
smoother, faster, and easier for enterprises of all sizes.

To implement IP telephony the following checks on the existing
network may be considered: electronic check and analysis of the total existing
network for QoS; bandwidth estimation, as enterprises are increasing the load on
the network with voice in addition to data; knowledge of the voice and data
standards and protocols (implementation support); survey of wireless LAN, if
there's wireless network; network redundancy, as voice network should not
fail.

IP telephony is struggling to establish a foothold in the market since uptake of pure IP solutions is predominantly in greenfield opportunities. The exorbitantly high prices of IP phones is one of the major challenge that continues to hamper the growth of this market. Voice is carried over the network, which is shared by various applications. This causes time lag or poor voice quality at the receiver's end. Source: IDC

Hurdles in the Way

Till recently, a single infrastructure was not allowed in India. However,
with TRAI notifying approval for "logical partitioning" of public
switched telephone network (PSTN) and closed user group (CUG) networks,
enterprises, service providers, application software developers as well as
Internet telephony vendors have a lot of reason to rejoice. Corporate users now
can slash down the investment that goes into setting up networks as they would
not have to manage the expense of two separate PSTN and CUG networks.

According to Punja of Cisco, "Interoperability is a major
concern due to lack of standardization. However, with the adoption of standard
protocol such as "SIP" in the call control engine, organizations can
integrate their legacy or hybrid systems with Cisco IPT solutions thereby
preserving their investment. However, full convergence would take more time but
will further reduce cost and improve RoI for customers implementing IP
Telephony."

Darryl Green, CEO, Tata Teleservices feels that the IP telephony
market is yet to take off in India due to regulatory restrictions. According to
him, "Domestic IP telephony is currently allowed only on a closed user
group (CUG) setup and telecom operators are not permitted to use their existing
infrastructure to offer IP Telephony services. While a few large enterprises
have adopted IP telephony for their internal communication requirements, the
market is very small. There is, however, huge potential with respect to this
technology platform and it warrants focus from telecom operators and regulatory
bodies."

Service Providers Landscape

With the onset of broadband in India every service provider is planning to
deliver killer applications and content to homes. VoIP is fast becoming the part
of the communications technology that will be playing a significant role in the
IP networks space along with Ethernet.

According to IDC India's Quarterly Enterprise Telephony Equipment (ETE) Tracker, 2006 the Indian ETE market stood at $257.5 mn (for the period January 1, 2006 to September 30, 2006), with 2006 expected to close at $358.5 mn. Forecast for the year 2007 is $419.2 mn. These estimates and forecasts include telephony products like Pure IP PBX, Hybrid IP PBX, PBX KTS, IP Phones & A/D Phones. Source: IDC

Tata Indicom offers a suite of customized solutions under the
'corporate internet telephony' portfolio, allowing customers to connect with
the world using a voice network through the Internet. The company claims that
this technology facilitates clear and smooth voice transmission and gives the
user up to 70% on all international calls.

Reliance is looking at offering IP telephony as a managed
Communication Service. The objective is to provide for a superior user
experience and extend a wide range of content and application services for the
enterprises in addition to traditional voice services. Reliance's IP Telephony
would cater to the requirements of the various user groups within an enterprise.
Some of the services that would be delivered through IPT , which are not
available with traditional telephony solutions include distributed enterprise
networking, content delivery on high end IP phones, video telephony experience,
tele presence, unified communication and high quality voice.

BSNL is currently not providing IP telephony services. MTNL has
already rolled out its IP telephony services and is currently in the process of
registering the user enterprises. Other service providers in the IP telephony
space includes Airtel.

Current Trends

India, considering it is still a market in its infancy as far as IP
telephony is concerned, a market with a lot of potential. Also, India is a
competitive marketplace and the fast-growing stature of the country as an
outsourcing hub-and the resultant boom in the BPO space-means that the
demand in the market is set to soar faster than anywhere else in the world.

	Key Players in the Indian IPT Market
	Avaya Global Connect Siemens Alcatel Cisco Nortel Ericsson

Though regulatory issues remain, it is quality telecom solutions
and services, and operational support at the back-end, which will determine
success or otherwise for enterprises .

According to Reliance, the Indian telephony market is not very
different from its global peers. The company expects enterprises to start
migrating to IPT in the near future. The adoption rate, especially in India, is
expected to be a function of the price. Today, IP PBX vendors largely drive IP
telephony in the enterprise segment and there is a prohibitively high capex
involved in the same. The entry of service provider in this market will make IP
telephony more affordable since the solution will now be available as a service
against a monthly charge. The only possible capex would be that required for IP
phones.

Says Sajan Paul of Nortel, "Indian market is as aggressive
as any other developed market for IP telephony. We have seen IP telephony as the
default choice for any green-field customer. The key features that drive this
trend is the mobility features combined with simplicity of installation,
advanced unified communication features etc." IDC's take: IP telephony is
struggling to establish a foothold in the market since uptake of pure IP
solutions is predominantly in greenfield opportunities. The exorbitantly high
prices of IP phones is one of the major challenge that continues to hamper the
growth of this market. Voice is carried over the network, which is shared by
various applications. This causes time lag or poor voice quality at the receiver's
end.

What's in Store

Going forward, IP telephony is expected to become the foundation to unify
communication applications and assess how business and communication processes
can be changed or integrated with IP telephony and collaborative applications.
Moreover, the success of the SMB market and specific vertical markets (such as
manufacturing, retail, healthcare, etc) will see a stronger success rate of IP
adoption with vendors getting aggressive in these areas.

Pragati Simlote

dqindia@cybermedia.co.in