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Issue of June 2005 

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The backbone’s not ready for convergence

Although VoIP and video conferencing are evolving, their quality and efficiency could be better. by Deepali Gupta and Vertika Yadav

Convergence is transporting voice, data, images and video traffic over a single network.

Our network is built to support core banking, but the point of going in for a VoIP solution is to dispense with other channels of communication

The withdrawal of TRAI regulations that had hitherto curtailed the use of IP telephony by enterprises resulted in a surge of deployments in the past few months. Infrastructure Strategies (IS) 2005 shows that almost 65 percent of enterprises have deployed VoIP. The average deployment isn’t humongous; 64 percent of organisations have less than 50 VoIP users.

R N Ramanathan

The BFSI, BPO and telecom segments are the largest users of convergent technologies. 67 percent of respondents from the telecom sector have VoIP, while 33 percent have video-conferencing facilities. 85 percent of respondents in the BPO segment have VoIP. Penetration of video conferencing is low; VoIP is a more flexible and lightweight technology (in terms of link utilisation). That combined with the global nature of the clientele of BPO companies has worked out in its favour.

Executive Summary
Not ready for convergence

Convergence is the best means to fully utilise resources that are already in place. Shifting to an all-IP network allows different services to be deployed at a lower cost. However, IP telephony is not for everyone.

Power pill

Convergent technologies are useful if an organisation has excess bandwidth on its network. Setting up a separate network or links just for VoIP isn’t worth it.

IP Tel—a viable alternative

While grey areas remain, the interest in IP telephony suggests that VoIP has got rid of its reputation of being unreliable. Adopters are now beginning to consider it as a viable alternative to traditional telephony.

With the influx of broadband connectivity, the use of VoIP among small and medium enterprises has surged. Resources tend to lie idle for much of the day on the average network. There is a pressing need for convergence so that common resources can be used for multiple tasks. VoIP helps enterprises use the IP backbone they put in place for activities such as disaster recovery during the day, and for data transmission after office hours, or in time slots where utilisation is known to be low.

IP telephony is a technology that has the potential to transform the way enterprises communicate and work. According to Rajiv Gerela, GM - Technology, Wipro, “There is a strong business case to be made out for VoIP.”

Managers are looking at IP telephony to help them curb rising expenses, extend the reach of their business, boost productivity and get returns on their investments in infrastructure. IP-based solutions will enable companies to deploy essential services such as video conferencing, collaboration and other value-added options. For SMB ventures that are mostly involved with exports and foreign partners, VoIP (ever since TRAI delicensed IP to PSTN calls for international calls) is a great way to make long distance calls.

The downside

Although VoIP is beginning to make business sense for many organisations, convergence itself is not a popular concept (29 percent of survey respondents that use convergence technology use video conferencing, while 65 percent use VoIP).

Gerela has been using VoIP in his organisation on an experimental basis, and 500 workstations in his company are IP telephony ready. IP telephony has failed to match his expectations. “The quality of service is inconsistent. Voice quality drops and even the service provider cannot explain why this happens. Overall, I think that traditional telephony works out cheaper for me,” he comments.

Apart from the initial cost, there are a few constraints to VoIP adoption. First comes voice quality (QoS) which is a determining factor for the user. Many VoIP network impairments that contribute to the overall call quality are delayed arrival of packets, lost data and jitter.

Security is another hurdle. As VoIP traffic is just data on the network, all security risks that affect data traffic are a concern for VoIP implementation. Denial of Service (DoS) attacks, spoofing, man in the middle attacks, and spam—all these network-based threats and nuisances affect VoIP.

Next comes lack of interoperability—VoIP equipment from one vendor may not necessarily work with that from another. Vendors are working on the problem.

S R Mallela

S R Mallela, CTO, AFL, explored VoIP as a possible communication backbone. He found the cost of setting up a backbone to be unjustifiably high, and his company uses Voice over Frame Relay (VoFR). Instead of working on layer 3 (IP), this works on layer 2. The channel sizes in VoFR are less than half that of VoIP.

VoIP telephone terminal costs can go up to three or four times the cost of traditional phones. “IP telephones are expensive and the cost of maintaining this equipment is high,” says Mallela. So it may be cheaper to call using VoIP, but the start-up costs are a huge deterrent. Mallela adds, “VoIP is expensive in terms of bandwidth utilisation, and it isn’t worth it for the voice quality that it provides.”

The VoIP difference

What will differentiate enterprises planning to adopt VoIP is how well they make use of communications to create business and that in turn would mean optimised use of the technology. Most of the companies agree that the technology must be deployed and assimilated correctly, or it falls short of expectations.

Organisations should check the following before any deployments:

  • Where does this technology fit into the organisation?
  • What kind of availability and QoS does it deliver to users?
  • Does it provide the correct access levels?
  • Is the technology perceived as too complicated among users?
  • Is it conducted in accordance with the business rules?

Success story

Some organisations have deployed and benefited extensively form VoIP. 70 percent of respondents from BFSI have VoIP deployments, while 30 percent have video conferencing. Most are reasonably satisfied with the implementations, and may take it to the next level in the coming year.

State Bank of India has one of the largest VoIP deployments, which are used for internal communication. The bank’s primary aim when setting up its IP telephony network was to support its core banking application. That process is still on way, and in the mean time, R N Ramanathan, DMD - IT, SBI, and his IT team use the available bandwidth to experiment with VoIP.

IP telephones are expensive
and the cost of maintaining this equipment is high

At present, SBI has about 4,500 IP terminals connecting locations across the country. “Our network is built to support core banking, but the point of going in for a VoIP solution is to dispense with other channels of communication,” explains Ramanathan. SBI uses a mere 1 percent of its IP infrastructure for the VoIP deployment. The bank has also linked up 221 locations for video conferencing, but that is done over ISDN lines for the moment. Ramanathan believes that even these will be done over IP in the long term.

NM suggests
  • Invest in VoIP if you have many ISD calls, and if internal communication requirements are high.
  • Video conferencing is a great option for large corporates and the education segment, because it can save travel costs for executives and students.
  • Consolidating multiple activities on a common IP network will make the infrastructure more manageable, and usage will be optimised.
  • If you deploy VoIP or video conferencing, ensure that sufficient bandwidth is allocated to it for good quality of service.

Deeepali Gupta can be reached at
Vertika Yadav can be reached at

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