Are You Ready For The VoIP Revolution?

One of the main reasons why people buy PCs today is to get connected to the Net. On the other hand, the Net has increased the demand for PCs. There is a strong possibility of something along the same lines happening, if and when Internet telephony is made legal. Well, there are others who say that IP devices will rule the roost. But is the channel ready to ride the Voice over Internet Protocol, or VoIP as it is commonly called, revolution? Or is VoIP merely some more hype?

At the moment, it is already legal to use VoIP technology over corporate virtual private networks (VPN). VoIP happens to be the technology that enables Internet telephony. However, thanks to the bureaucracy's complete lack of foresight as well as hindsight, India happens to be one of those rare countries where Internet telephony continues to be illegal!

Though it is not clear when it is likely to be legalized, optimists like the Minister of Information Technology, Pramod Mahajan, have been quoted saying that this would happen when the Convergence Bill becomes the law within the next five months. Of course, there are others like DoT's Shyamal Ghosh, who claim that Internet telephony would be legalized only in 2002 when VSNL loses its monopoly in international long-distance calls. 

But both optimist and pessimists are unanimous that the arrival of Internet telephony and VoIP is inevitable. In fact, various principals have already tested and kept VoIP and Net telephony products ready for the market, in anticipation of legalization. Therefore, it is time for channels to discover VoIP and the opportunities it promises to bring. 

What's VoIP?

VoIP or Voice over Internet Protocol, is a way to send voice as 'packets' over a network. It all began one fine day when someone wondered why voice cannot be sent as packets when data is already sent and received the same way. 

It did not take long before people began making calls over the Internet and before they knew it, traditional long distance telephony providers began getting irritated. In the beginning, they dismissed it as just another geek's prank. But as the quality of calls made through the Internet began getting better, they began to get the jitters, even as their revenues were affected. To make matters worse, these pranksters were using their own infrastructure to make calls almost for free! 

The telecom majors finally had no choice but to read the writing on the wall. This was no prank, but something even a Graham Bell would have failed to anticipate - the birth of a new industry. As they say, if you can't beat them, join them.

Soon everybody entered the fray. Software companies, hardware specialists, telecom companies, systems integrators, network integrators and even portals. There are several sites that offer free Internet telephony. To name just one player, Yahoo! Messenger users can already use Net2Phone to make almost free calls, if only VSNL looked the other way. 

There may be complaints about voice quality, but it should not be forgotten that technology is getting better everyday. After all, necessity is the mother of invention and analysts have already predicted that the days of free long distance calls are not very far. Well, who thought text would be sent and received free around the globe until Hotmail appeared on the scene? 

Developments at home 

That's not all. There are national long distance players waiting in the wings to get into the fray. If everything goes well, these license holders can be expected to offer long distance calls to customers at one-third the price of a normal telephone call. 

Principals and vendors are not idle either. Says S V Ramanna, Country Head (Technology Sales) Cisco Systems India: "We are in talks with a number of DLD players to 'packetize' their networks, so that voice, video and data on the same network, and provide a long-term business case on large investments. The DLD market is a big opportunity for Cisco because most of them are looking for scalable, robust and flexible technology that will generate new, customer-sensitive services". 

Cisco claims to have a very strong offering for enterprises based on the branded AVVID architecture (Architecture for voice, video and integrated data), and a suite of software solutions for addressing call centers and unified messaging, which some corporates already use. 

Since enterprises need standards-based, cost-efficient and technologically future-safe solutions for voice, video as well as data converged networks, Cisco sees them as potential AVVID users. Besides, it plans to tap the huge opportunities in the VPN market aggressively.

Some principals have already launched their products in the market. D-Link, which is a distributor of Cisco products, recently concluded a deal with Clarent, the world leader in VoIP solutions. Anand C Mehta, Marketing Manager, D-Link India Pvt Ltd informs that there are plans to target ISPs and all operators who would be awarded NLD licenses. "We believe the NLD operators plan to launch their services as soon as VoIP services are opened up. So we are in the process of supplying trial / test equipment for in-house use on private leased lines, which are legal," he informs.

Others too are optimistic. Anil Gupta, Director, Convergent Communications (India) Pvt Ltd feels that "The Convergence Bill would be passed within three to four months from now. There is pressure in the market to open up VoIP". He believes that ISPs will play a very important role, as they will have an option to bundle VoIP and sell it as a complete solution. Or they may sell Internet connectivity and suggest VoIP products to be purchased off the shelf. 

Products galore

Which only means, that VoIP is no hype. Opportunities exist in terms of products, as well as services. Cisco approaches potential customers with end-to-end solutions. "We offer solutions based on open standards and they work seamlessly together. Our solutions are targeted at customers who may be large-scale service providers, whether they are in the telecom, Internet or wireless industry; and SMEs," says Ramanna. 

Some of the Cisco products and solutions which address the Indian VoIP segment are the, Voice Gateways and Gatekeepers, Signaling and Switching Systems, OSS and BSS including Prepaid and Post Paid Billing, Call Agents, IVRs and for Backbone Optical SDH/SONET, Long-Haul and Short-Haul DWDM products. 

They also have security products, MPLS-VPNs high-speed routers, NMS products including provisioning and network management products. Besides these, it has several broadband access products on technologies like dial-up, cable and DSL platforms that support

VoIP.

But D-Link's primary focus is on two broad segments- Carrier Class Equipment and Customer Premise Equipment. Carrier Class Equipment would mainly be used in the backbone infrastructure of carriers and service providers. D-Link has a tie up with Clarent (USA) for this range of products through a master distributor agreement for India.

While Customer Premise Equipment can be used by large enterprises as well as SOHO and SME. These are manufactured by D-Link under a technology license agreement with Clarent. Of course, D-Link also distributes a range of Cisco routers, a number of which come with fixed or optional modules for VoIP applications.

Then there is Convergent Communications' VanGuard range of products which supports both Voice over Frame Relay (VoFR) and VoIP by default. The whole range is available and is being sold through its channel partners. Kobian also has products that enhance the quality of voice when transmitted over IP networks.

A step beyond box pushing

Most of these products seem to have good potential and this is where the channel comes in. All Cisco product sales in India are through Cisco Authorized System Integrators. Cisco does not sell directly. They are currently available through this network. But the role of channels in the VoIP would have to go substantially beyond mere box pushing. 

For example, data networking experts will need to understand the voice technology and telecom service provider expectations, and telecom service providers will need to understand data networking. 

In this regard Cisco seems to be well placed. "From basic voice concepts to signaling, switching, business and operational support services, network management and quality of service (QoS) are areas where engineers of our channel partners will need to be deployed. Thankfully, with the excellent rapport and business planning engagements with our partners, in many of the above-mentioned areas, we have the requisite skills," says Ramanna. "In fact, some of our telecom focused channel partners provide a great amount of value addition for our VoIP go-to-the-market model," he claims.

D-Link has yet to think in terms of a channel program, though it sees distributors like Sejutronics eyeing its CPE products. But Convergent already seems to have gone far ahead in the channel game. "We regularly organize training programs. Since we already have products that support VoIP, our channels are well aware about support and installation procedures. We are not waiting for the Convergence Bill. We are well trained to meet any eventuality whenever VoIP becomes legal," informs Gupta.

He believes that once VoIP is legalized channel partners who are into promoting products supporting VoIP technology will get a boost. "It will soon become a commodity business for channels and we can foresee them selling VoIP products in volumes. We can also foresee vendors working towards providing channels and end users with latest products," he predicts.

Legalization is also expected to grow in terms of margins for channels. Products like routers, switches and modems will soon find a prominent place in the market as end users begin to buy it off the shelves. Gupta foresees this market to be more profitable for channels. 

It is evident that as the VoIP market expands, principals will seek to expand their channels. 

Clearly, aspirants must have sound technical skills to get onto the VoIP bandwagon. It must also be mentioned that there is no "chicken-or-egg" situation in the VoIP market. Both the products as well as the market already exist.

The market perceptions

But like in any other business, perceptions about the market vary from player to player. For instance Cisco would like to target the small, medium and large service providers and enterprises. Ramanna believes that packetized networks will take off wherever there are a large service providers or enterprises with communication needs, whether the offices are in Goa or Guwahati. "Our solutions are economical, flexible and scalable. So we expect NLD players all over India to take to it," he reasons.

However, D-Link sees it a bit differently. "The VoIP market in India would be larger than the entire telecom market today by the year 2005," says Anand candidly. However, he stops short of making a sales forecast about the number of pieces per VoIP product. He feels that VoIP would take off to a greater extent in the West, North and South of India and to a lesser extent in the East.

Anil Gupta of Convergent, which already runs 40 to 50 VPNs in the country, thinks that all corporates with multiple offices will adopt VoIP. "I personally feel that the market will grow by about seven to eight fold," he says. Convergent hopes to target corporates, banking as well as service sectors.

Other factors that count

Within the VoIP market, there are a number of products ranging from freely downloadable software to the usual PC, which could be configured to make calls over the Net. While there is a chance that more and more PCs will be bought to make calls over the Net, it is also likely that this may not happen because of VoIP calls being available over normal telephones. 

Subscribers would have to call a number that could connect to his service provider's VoIP network. In this case, subscribers need no even know whether his messages are being sent over an IP network or not. They would, of course, have to pay much lesser, if they were not subscribers of such services. In India, the NLD license holders are expected to offer such services. 

There are also products like IP phones, which are instruments that can facilitate VoIP calls without using a PC. Such IP devices may also do well, considering the fact that calls can be made without PCs or paying service providers. 

But there are other trends fueling the demand for PCs. It must not be forgotten that video-conferencing over the Net is fast catching up thanks to applications like Microsoft NetMeeting and C-u-seeMe. Therefore, there is a distinct possibility of an increase in demand for multimedia kits. 

Besides speakers and earphones, there would be demand for products like special voice cards and other equipment that enhances sound quality. Kobian has a few such products in its portfolio. 

Even if voice eventually will go free over IP networks as experts predict, channels will only gain. After all, the market for solutions that facilitate various applications can only be expected to grow. 

Bobby Anthony with inputs from Sunila Paul, Bangalore