...integration into enterprise applications like unified messaging — areas the carriers do not have experience."
Further, these skills are being embraced by traditional IT integrators such as IBM, CSC, EDS, Commander and Dimension Data — many of whom have done a better job than the carriers in building up their skill-sets.
If you look at who will save the most money from VoIP, it's not the enterprise market — they are not paying a heck of a lot for calls these days anyway.
Jim Kellett, product manager for ISP Internode
VoIP in small business and consumer
Small businesses are also starting to embrace VoIP, says Cannon. Networking vendors, he says, are now focused on the small- and medium-sized market. IDC reports a 40 per cent increase in SME purchases of IP PBX systems in the last quarter of 2007.
Further, there are an increasing number of VoIP services coming to market specifically geared towards small businesses. Optus and iiNet, for example, have started offering multi-line VoIP services for as few as two to three lines.
Optus launched a product called ipPhone (a softphone product catering for two to six lines) and a VoDSL service (a voice and broadband bundle over the DSL network offering 4-8 lines). The carrier plans to add a voice module to its "Optus Evolve" business-grade IP-VPN product, built on an application-aware MPLS network that guarantees quality of service.
Neither carrier, however, has any plans to launch a VoIP service for the consumer market.
"If you look at who will save the most money from VoIP, it's not the enterprise market — they are not paying a heck of a lot for calls these days anyway," says Jim Kellett, product manager for ISP Internode. "The real savings are for the residential [and small business] markets — because of the cheaper call rates and the number of calls they make."
A simple comparison illustrates this succinctly. Telstra's cheapest home phone plan (HomeLine Budget) charges $19.95 per month for line rental, with 30c untimed local calls and 37c per minute calls to mobiles. The cheapest VoIP alternative, offered by GoTalk, is significantly cheaper — a flat $14.95 monthly fee for all-you-can-eat calls to any device.
Munch says he doesn't expect carriers to risk "cannibalising what is now a pretty good cash cow" by offering consumers any alternative to the PSTN network.
"We haven't seen any players offering VoIP services encroach on our revenues," says Optus's Boothroyd. "When it comes to public VoIP, customers are concerned with quality and tend to stick to a trusted supplier."
Telstra spokesperson
"It's pretty simple — most people want quality, reliability and simplicity of use," said a Telstra spokesperson. "VoIP usually doesn't provide any of that. If your computer is off, so is the service. If the electricity goes out, so does your phone. Who wants that?"
Consumers aren't interested in VoIP, says Telstra, because of "confusing offers from different vendors, complexity of set up, technical and security problems, quality of service issues, incompatibility with existing services, availability and patchy support to name a few. This sometimes outweighs any cost-savings that might be available."
This defensive position is, from a Telstra shareholder perspective, understandable. The PSTN network, according to Kennedy, is still a major source of competitive advantage for the carriers — even if the revenues derived from it are falling. The PSTN line can be used for telephony and as the conduit for ADSL connectivity, fax machines or Pay-TV access.
"A carrier with a huge switch that's already paid for itself can just sit on it," says Kellett. "They don't need to react quickly to VoIP. It's only when it starts to cause them pain through an erosion of revenue that they have to fight back."
The carriers may soon have to fight a little harder. In the last six months, ISP's such as Adam Internet, iiNet and Internode have trialled a new service called Naked DSL — a fixed line broadband service which no longer requires Telstra's PSTN.
Many residential users have only remained on fixed phone lines to use them for DSL broadband in the home. But as consumers continue to rely more on mobile phones as their primary means of staying in touch, the fixed device at home is getting used far less. Many would be happy to skip Telstra's monthly line rental charges if given the choice.
Jim Kellett, product manager for ISP Internode
Internode claims that its trials of Naked DSL have been wildly successful. The response to its barely advertised product launch in March "outstripped expectations" in terms of subscriber numbers. Kellett expects that a higher percentage of these customers are coupling Naked DSL with a VoIP handset.
For now, the carriers are fighting to keep PSTN relevant — bundling fixed phone services as part of the total communications package. This gives the consumer the convenience of a single bill across home phones, broadband connections and mobile telephony. In the face of such convenience, consumers tend to resist any temptation to change.
"You won't see the carriers go down the VoIP path all guns blazing," says Kellett. "I think it's more likely they will offer more fixed price bundles like Optus Fusion. They will keep phone calls on their old infrastructure as long as they humanly can."
In the meantime, both carriers will continue to build out new IP infrastructure — with both Telstra and Optus planning to be "all IP" by around 2010.
"The common trend across all large carriers across the world is that by 2010-2012, all will be migrating their data services to IP," Munch says.
One would expect that once this investment is complete, carriers will start offering the very public VoIP services that they so vehemently write off as unworkable today. In the meantime, they will continue to drop PSTN prices to hold off the VoIP threat.
"That's why VoIP, to be successful, has to deliver something the older networks don't," says Kellett. "There has to be a focus on value-added services. "Yes, it's got to be cheaper but also better."
It wasn't long ago they didn't like broadband - because it was eating away at their dial-up revenues. Eventually they had to accept it. no different for VoIP.