Bank decided to divert all voice calls between its offices
and branches nationwide through its data network using
VoIP technology. By doing so, the company cut communication
costs substantially at the same time making use of the
unutilized WAN bandwidth. by Soutiman Das Gupta
IDBI bank started operations
in 1995 and is the tenth largest development bank
in the world. It has a very strong national presence
in areas of corporate and retail banking. It has
a large nationwide distribution of zonal offices,
branches, and ATMs.
bank wanted to cut the costs of telephone and
communication bills. It also wanted to make use
of unutilized WAN bandwidth.
company deployed VoIP technology in its existing
network with minimal hardware and software procurement.
bank now routes all its long distance calls using
VoIP technology. It has saved the company Rs 5
Lakh in just a single month (The month of June).
At this rate the bank hopes to achieve fast ROI.
any progressive enterprise, IDBI Bank was looking at
ways to cut costs. And the head of every department
resolved to put in their utmost to contribute to the
initiative. Neeraj B. Bhai, CTO, IDBI Bank devised an
effective strategy that successfully addressed cost
issues and made use of unutilized bandwidth in its nationwide
WAN. He decided to divert voice traffic through the
network by using VoIP technology.
By deploying VoIP technology in the existing WAN infrastructure
the company was able to save substantial amounts of
money. "In the month of June, we saved Rs 5 Lakh.
At this rate we expect a very quick ROI," said
Neeraj. Deployment work started in September 2001 and
the VoIP setup was functional by February 2002.
Cost: Key driver
an organization communication costs comprise a rather
big chunk of expense. We had to settle steep telephone
bills for long distance calls between our branches and
offices nationwide. So we had to devise ways to minimize
it. We also noticed that the bandwidth in the nationwide
WAN was not always fully utilized. This was because
the WAN was built beyond current requirements to support
redundancy. Since free bandwidth was available, we thought
it should be put to use," opines Neeraj.
A sizable investment
Since cost reduction was the biggest reason for deploying
VoIP the company had to calculate the equipment and
software expenses involved before implementation. "In
the beginning, we bought 80 IP Phones which costs Rs
25,000 each. The prices have decreased now, but since
we were among the early adopters of the technology in
the country, we had to make our initial purchases at
those prices. The call manager software and the hardware
server cost another Rs 12 Lakh. It seemed like a very
large investment in the beginning. But we knew we could
recover our investment quickly," said Neeraj.
IDBI Bank needed a hardware server that supported QoS
features to run Cisco's Call Manager software. The software
is a call-processing component which extends enterprise
telephony features and functions to an IP Phone. The
routers at different locations needed to support QoS.
of our routers are from Cisco and support QoS, which
meant that the VoIP solution had to be compatible with
Cisco hardware and OSs. We chose Cisco as the vendor
to avoid any compatibility issues. Performance and integration
were more important," explained Neeraj. The IP
Phones are also from Cisco.
Setting it up
Neeraj decided to centralize the call manager application
at Mumbai instead of maintaining regional call managers.
"Although you can optimize bandwidth in a decentralized
environment, management is easier, especially since
the number of IP Phones are not too many to begin with.
Besides, in this architecture when two locations have
to talk, the call is set up in the central location
and the data transfer for the rest of the call takes
place through the shortest possible link," said
The IP Phones are plug-and-play devices which can connect
to any RJ-45 wall socket. They function like a regular
TCP/IP host device and communicate automatically with
the call manager. The existing routers and switches
in the network did not need any cards or modules to
The bank's in-house IT team has developed a software
which keeps track of savings made from using the IP
Phones. It collects information from the call manager
regarding call duration and compares it with the pulse
rates of MTNL and other service providers. This way,
the company is able to calculate the returns in real
The zonal offices at New Delhi, Kolkata, Chennai, and
Mumbai, and the data center at Mumbai have 2 Mb links.
The branch locations usually have 64 K links. Since
the data network now has to bear the extra burden of
carrying voice, one would expect the network to slow
down or develop performance issues at locations that
do not have 2 Mb links. Neeraj is confident that such
events will not happen.
had built the network with capacity for very high traffic
right from the beginning. So performance issues will
not arise. We typically use 64 K links between our locations
and have not installed more than two IP phones at each
location. Each IP phone uses 11.2 Kbps bandwidth, so
both phones don't use more than 22.4 Kbps. And the call
manager gives us reports of call irregularities. If
a call data has been retransmitted in a location it
will be registered as a poor quality call. If there
are too many poor quality calls, it may be a problem
with the physical link or the bandwidth. So based on
this report we can enhance the bandwidth. However, we
haven't felt the need to enhance this bandwidth as yet."
The network is also monitored at each link. If bandwidth
utilization crosses 60 percent, excess capacity is added
to the link.
The IP Phone converts voice into packets of data which
behave like any other data packet in the network. An
extra QoS bit is added to these packets so that routers
and other network devices can distinguish them and give
them more priority for transport. This eliminates jitters
in the voice. The TCP/IP headers are compressed with
a G.729 codec so that the amount of bandwidth used is
the network transmits a voice call the data traffic
gets second priority due to the QoS bit, but any change
in data access speed is not generally perceptible. This
is because the delay is only a few hundred milliseconds.
The user will not even realize that a Web page which
took 15 seconds to load earlier, now takes half a second
more," said Neeraj.
A few locations have legacy Motorola routers which originally
didn't support QoS. Software patches were applied to
QoS-enable those devices.
that the bank personnel have realized the benefits of
VoIP, many have started using the IP Phones. And when
personnel receive calls from other branches through
regular phones they ask the caller, "why don't
you use the IP phone," said Neeraj.
The bank certainly wants to take more initiatives along
the lines of VoIP. It has plans to purchase 45 new phones
soon. A Cisco conference bridge will also be deployed
in Mumbai. This will allow six people to talk simultaneously
in a conference. And it will allow four simultaneous
Das Gupta can be reached at email@example.com