Why Rip & Replace?

VoIP is the hottest topic in premisesnetworking today, and justifiably so. It offers end-user businesses clear and tangible benefits, and offers resellers and integrators tremendous opportunities for designing, installing and maintaining new networks.

But if VoIP is not implemented and managed properly, the cost savings may never materialize. Stranded investment in existing, functional telecommunications equipment and large capital outlays for new equipment can sour the ROI for VoIP implementations.

When it comes to planning network migration, the desire to gain the benefits of a lower-cost converged network may conflict with the desire to leverage sizable investments in existing equipment. A company may have millions of dollars worth of investment in its PBX systems, automatic call distributors and other voice equipment. Unless this equipment is of very recent vintage, it will not be compatible with a VoIP network.

So a network planner faces the choice of deploying an end-to-end VoIP solution, typically including the purchase of costly new telephony equipment, or delaying a move to VoIP, foregoing its benefits.

There is one more option: Pseudowire, or TDM over IP (TDMoIP), technology that lets legacy equipment communicate over an Ethernet or IP network, with or without voice compression. It emulates the attributes of TDM services such as T1/E1 circuits over a packet-switched network, acting like a wire transparently carrying that particular service through the network.

Architecturally, the TDM traffic from PBXs is segmented and converted into packets, which optionally may be compressed via industry-standard codecs. With the addition of a header to each packet, the PBX traffic appears to the Ethernet/IP network just as any other packet.

Once transmitted, the original bit stream is reconstructed. Headers are removed, the voice stream is decompressed, packets are concatenated and clock synchronization is regenerated. The receiving PBX gets the traffic in the TDM format it understands.

This technology lets integrators offer their customers the option of embracing VoIP today and leaving legacy voice equipment in place, with a far less expensive upfront investment. The PBX does not have to be an obstacle to network evolution.

Another beneficial aspect of TDMoIP is its optional voice compression, to maximize use of the communications channels. This is extremely important to multisite, distant operations. For instance, if an E1 circuit able to carry 30 simultaneous telephone calls from Dallas to Bangalore, India, costs $4,000 a month, a remote call center with 600 agents may need 16 circuits to provide sufficient capacity. That $64,000-a-month recurring cost is a significant drag on profitability.

VoIP can yield savings, since it uses a codec that compresses voice into a smaller bit stream. But once again, the upfront costs associated with VoIP deployment can be high. Alternatively, TDMoIP technology with voice compression enables the continued usage of legacy voice equipment while providing about 60 percent more efficiency than VoIP alone. In this example, moving to VoIP could reduce the transmission needs to two E1 circuits, for a monthly cost of $8,000. However, buying two IP PBXs could add about $900,000 in costs, resulting in a ROI timeframe of almost a year and a half.

Using TDMoIP could allow the call center to slim down to a single E1 circuit, for a recurring transmission cost of $4,000 a month. With the TDMoIP equipment cost at about $88,000, the ROI period would be reduced to only a month and a half. TDMoIP uses the same codecs as VoIP, but assembles the packets in such a way as to compress voice traffic down to a 16:1 ratio and still maintain toll-quality audio. Each E1 circuit, then, could carry 480 simultaneous calls, rather than 30.

Clearly, TDMoIP offers the opportunity to move quickly and painlessly to next generation networks. A companys legacy voice equipment does not have to stand in the way of its migration.

Larry Jacobs is vice president of marketing for RAD Data Communications Inc. Contact him at [email protected].