The Way Business Is Moving published by
Issue Date: September 2008

The VoIP puzzle

September 2008
Simon Dingle

Voice over IP is entering the value park for business, while traditional mobile operators are faced with what it means for them.

Convergence is bringing everything onto the IP stack. First in line for the move was voice, and ever since the debate has been whether or not voice over IP (VoIP) offers any real value for business, especially SMEs with their lower economies of scale. Now the debate has expanded to include mobile. Your cellphone is fast becoming the centre of your world and the players with stakes in the pie it represents are grappling for slice size. VoIP is a notable conundrum on a platform built on offering voice communication via other channels.
In the business arena VoIP is often perceived to offer cost savings. This is only really true for businesses that have sufficiently high call volumes. Especially in South Africa where bandwidth is unusually expensive. But VoIP does have other advantages, such as quick and easy user provisioning and flexibility. For small to medium sized businesses that are looking to derive value from the technology, however, there are more things to consider than just cost.
Fatter pipes, please
Many small to medium sized businesses in South Africa correctly identify ADSL as the most cost efficient connectivity option. The more expensive leased line offerings are out of their league and wireless simply does not cut the cheese in terms of latency and contention. But the fastest local connection available for ADSL is only four megabits per second, at time of writing.
“And while one might have four megabits of downstream bandwidth, upstream is considerably less and this is a key understanding when discussing the use of VoIP over ADSL networks,” says Wayne de Nobrega, CEO of Technology Concepts.
Technology Concepts CEO, Wayne de Nobrega
Technology Concepts CEO, Wayne de Nobrega
He explains that one of the challenges facing the use of VoIP on ADSL connectivity stems from the structure of data packets used by VoIP protocols.
“This is largely dependent on the codec used for VoIP, but one generally ends up with an initial voice packet of about 22 bytes in size,” he explains. “This is then transmitted over your local area network and must be padded up to 64 bytes in order to do so. The padded packet is then sent to the ADSL router and is subsequently transmitted into the ADSL ATM network. In this environment all packets must be 53 bytes in size, and so the 64 byte voice packet is split into two 53 byte packets and further padding takes place.”
The effect of this is that the initial 22 byte voice packet ends up being transmitted as 106 bytes in total.
“Using a better codec with higher compression rates makes no difference either, as the packet will always be padded up when transferred,” states de Nobrega. “At the end of the day 64 kilobits per second will be required for a decent sounding VoIP conversation, irrespective of the codec employed. And if one considers that only 384 kilobits per second of upstream bandwidth is available on the top ADSL offering from Telkom, this means that a maximum of four or five conversations can take place using VoIP on ADSL at any given time. Less if one is using the Internet for other things at the same time too, such as e-mail and web browsing, which is inevitable. This is simply not good enough for companies with more than a handful of employees.”
The answer, according to de Nobrega, is for SME businesses to make use of tailored offerings, such as Technology Concept’s truly bonded ADSL offering that combines up to five ADSL lines, along with quality of service (QoS) for VoIP built directly into a custom-developed router.
On the streets
VoIP on mobile phones is already a reality, both at a consumer level with free services and applications such as Skype and Fring, and at a business level with many enterprise offerings in the space. For the network providers this is a tricky situation, however, as their core business is built on voice. Fortunately for them this is changing as data connectivity becomes big business, especially in a South African context where the likes of Vodacom and MTN have taken advantage of the terrestrial bandwidth situation to become major providers of bandwidth themselves.
It seems inevitable that eventually GSM will fall away and cellular networks will focus on IP technology for everything, as is already the case in Japan where most networks make exclusive use of 3G. For now, however, being a GSM provider and allowing VoIP on your data network seems to raise a conflict of interests.
Avi Shechter, co-founder and CEO of Israeli start-up Fring has already built a business aimed at the new mobile paradigm. Fring makes VoIP possible on just about any mobile phone with data connectivity, along with IM services, all via its own protocol or other services such as Skype, Google Talk and MSN Messenger. It also has support for SIP, even on handsets that do not.
The company is turning Fring into so much more than just a VoIP and IM client, however, and has recently released the Fring API, allowing developers to create their own plugins and channels for the platform. The future of mobile applications?
“The release of Fring Add-ons represents a natural and exciting step in the evolution of our product,” says Schechter. “It is designed to bring the richest user experience possible and put all of the Fringster’s communication and mobile Internet needs into one place.”
While the office may still be a puzzling place in terms of VoIP, this will change as bandwidth continues to grow cheaper and fatter. On the mobile front, however, benefiting from VoIP is pretty simple. But the future of both is clear; IP convergence is gearing up to deal a death-blow to conventional voice frameworks, both mobile and otherwise.

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