Enabling End-to-End VoIP

Despite some technical hurdles

still to overcome, the ability of VoIP to drive cost savings and additional functionality for enterprise voice calls is pushing the development of VoIP peering. The goal is to enable VoIP carriers as well as enterprises that have turned to VoIP to interconnect their networks so calls originating or terminating as VoIP are carried over TDM networks as little as possible.

The push to end-to-end VoIP calling follows in the path of similar technology and market changes that pushed the development of IP data peering.

“When you look at the way IP networks evolved, enterprises started peering first on their own IP networks and then the carriers came in and said, “I’ll offer you a managed IP network”…and I don’t think that with voice peering it is going to be any different,” says R. Paul Singh, vice president of business development at VoIP equipment provider Veraz Networks Inc.

Singh was speaking to more than 100 telecom executives at the telx on the Horizon: Voice Peering 2005 event held in downtown New York in October.

According to Hunter Newby, chief strategy officer at telx Group Inc., which hosted the N.Y. event, there remains no single definition of VoIP peering, and different vendor and carrier offerings can range from interconnection just at Layer 3 all the way through Layer 7 switching. However, he stressed that the driving force behind VoIP peering will come from enterprises that have transitioned from paying per minute for their intra-office calls over TDM networks to flatrate pricing of VoIP calls. That shift in corporate demand has already spawned a new market in 2004.

“Last year, there were no transatlantic Ethernet providers; now there are a dozen or so running voice for corporate WANs,” says Newby. Newby says telx is well-placed to facilitate enterprise VoIP peering at its interconnection facilities at carrier hotels in New York and Atlanta.

According to Song-Poh Lee, vice president of marketing at InfiniRoute Networks Inc., a company that is carving out a role as a carriers’ carrier in the VoIP interconnection space, VoIP peering and the companies looking to deploy it still face significant challenges.

Lee pointed out that although IP peering and VoIP peering share many characteristics, there are key differences too. While best-efforts IP data packet delivery is fine for data, VoIP has a very low tolerance for quality variation. Also, unlike data, not all VoIP packets are of equal value. For example, calls terminating on a PSTN in Cuba will face higher charges than those terminating in the United States.

Companies seeking VoIP peering need to have a way to monitor those different values and provide for financial settlement. Also, Lee says, while IP data traffic is pretty standard using TCP/IP or Ethernet protocols, with VoIP there is trouble interoperating even between different versions of the same standard such as H.323 versions 1 and 2. In addition, he says, network equipment from different vendors, while conforming to the same standards, often cannot interoperate simply.

Nevertheless, Lee agrees that as companies are investing in VoIP and creating VoIP islands that will eventually make sense to connect. InfiniRoutes offers carriers neutral managed VoIP peering service through its managed voice platform that enables private companies to connect to VoIP termination partners as well as take advantage of a wholesale interconnect marketplace.

For its part, Junction Networks, with its Junction Carrier Fabric, is targeting carriers looking to enable VoIP services in their network. The company enables existing carriers to transform their TDM switches to enable VoIP calls to be connected through any SIP platform or the Junction Networks Asterisk system via the Internet. The offering keeps carrier billing and provisioning systems the same, with Junction handling the connection to the Internet.

Junction says its VoIP peering fabric also will enable next-generation voice and data offerings such as voice mail, presence detection and PBX functions as well as least-cost routing of traffic from legacy TDM networks to VoIP connections.

“We see peering as getting away from just carriers talking to each other and long-distance being just one of the services out of a whole range that an enterprise will connect into a fabric to get,” says Michael Oeth, CEO of Junction Networks.

Despite the potential and enthusiasm for VoIP peering, there is also an acceptance that some markets will prove harder to transition to VoIP than others while much of the existing TDM equipment already in use will remain for sometime.

“TDM is not going away tomorrow. Six years ago, people were talking about the death of TDM but they are here to stay and will probably not fully go away in our lifetime,” says Singh of Veraz Networks. Even so, he maintained there is a push for VoIP and a growing demand for VoIP peering. Over the past three years, Singh says Veraz has shipped around 25 VoIP systems and that a lot of the technical issues in VoIP peering have been solved. “Our largest customer today does around 5 billion minutes a year,” says Singh.

The panel also agreed that mobile operators will be the last to open their networks to VoIP peering. “VoIP isn’t at the top of the wireless carriers lists. They have other issues to worry about,” says Lee at InfiniRoutes. However, while there are technical issues to be resolved, such as ensuring VoIP packets do not have to undergo additional compression on CDMA and GSM networks, there are also economic barriers as mobile operators, notably in Europe, look to maintain their premium charges on calls on their networks.

“Only when VoIP from PDAs on Wi-Fi networks start to impact their businesses will they start to be friendlier about opening up their networks,” says telx’s Newby.

Even so, in the enterprise and wider market, there remains a significant opportunity in enabling and offering VoIP peering. -[Voice peering] technology is here. You are at the bleeding edge but that means the opportunity to make good margins is here today. By the time it’s simple and just involves plugging in a box, then anyone can do it - then nobody can make money as it’s a commodity product,” says Singh.