VoIP and new ways to cut out the middle man

Some VoIP service providers offer free calls to other VoIP customers to compete against telcos

Voice over IP peering, which can, essentially, cut out the local telco and thus save costs, promises to be one of several hot topics at this year’s VON Europe conference in Stockholm.

Enterprise peering, where companies can connect their private IP networks directly to other companies they do business with, represents a significant shift in the way enterprises manage their networks. It is a subject leaders will likely discuss at the conference.

The process is, essentially, “in-sourcing telco spend,” says James Enck, European telco analyst at Daiwa Securities. As an example, he cites an announcement earlier this year that Royal Bank of Canada would convert fully to VoIP, directly connecting the IP networks of all its offices.

“Instead of paying Bell Canada for use of the PSTN [public switched telephone networks], they’re emigrating all of their internal traffic between offices onto their IT network, and the IT department will manage this,” he says.

A similar peering movement could help further reduce the cost of VoIP calls for other users. Speakers at a voice over cable panel session at VON are expected to touch on this subject. Some VoIP service providers, such as cable operators, are beginning to offer free calls to other VoIP customers — even those on different networks — as a way of competing against telcos. To make that offering efficient, the operators are finding ways to connect directly to each other, without involving the telcos.

Several cable operators in the Netherlands, for example, are using a third party, XConnect Global Networks, to handle call routing without relying on the PSTN, Enck says. XConnect helps cut costs for the cable operators so that they can offer free calling to end users.

“They lose some revenue but they want to get customers so that they can sell them TV or other services,” Enck says.

In the wireless domain, moves to similarly circumvent the operators are being met with resistance — another topic sure to spur debate at VON. T-Mobile UK says it forbids the use of VoIP for users subscribing to a new mobile data plan. While this move is related to customers using data cards on their PCs, it could worry third-party developers of VoIP clients for mobile phones.

“It’s a big discussion topic,” says Ross Brennan, chief executive officer of Cicero Networks, the developer of a VoIP client for converged wi-fi and cellular phones. He hasn’t seen many operators actually blocking such calls and also believes those that do might be met with legal challenges.

VoIP software client developers are already responding to the threat. In early May it emerged that Skype Technologies tweaked the most recent version of its software to be harder to detect and thus block.

Other VON topics include IMS deployment and triple and quadruple services.

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