US carriers forge ahead with IP despite customer reticence

Canadian carriers know all about IP. Bell Canada offers hosted versions of IP phone systems for all segments. Telus Corp. was first out of the gate with an IP-Centrex offering in 2003. Rogers Communications Inc. rolled out IP voice services some time ago. But what's the situation south of the border? Judging from comments made at VoiceCon, an IT event in Orlando earlier this month, US carriers face a tough situation. But that's not keeping some of them from ramping up their IP service efforts. Lisa Pierce, VP of IT analysis firm Forrester Research Inc., said almost half of the US businesses her company surveyed about IP phones are reluctant to move from legacy TDM technology, IP's predecessor. "More than 50% of the market not convinced of the benefit," she said at VoiceCon on March 9. As well, just 16% of respondents to Forrester's survey said they had fully deployed an IP phone system, whereas 35% were still in the evaluation stage. Nonetheless, US carriers are pushing ahead with their IP phone services. Representatives of BellSouth Corp., AT&T Corp. (which plans to merge with BellSouth) and Verizon Communications said they aim to convince businesses that telcos can provide the flexibility and stability that new IP users seek in a service provider. Jeff Lewis, director, advanced voice solutions at BellSouth, said companies considering IP phone systems are also considering the wads of money they spent on new TDM-PBXs a few short years ago. "They're extremely concerned about the investments they've already made," he said. Rather than attempt to convince businesses to walk away from those earlier purchases, BellSouth aims to provide an IP stepping stone - a product that offers some of IP's advanced features like unified messaging, but without the IP infrastructure at the customer's offices. This "Phase I Solution" lets BellSouth's cost-conscious customers keep their existing TDM infrastructure and use the latest IP-based applications at the same time. "We're looking forward to bringing this out by the end of the year," Lewis said, adding that the merger with AT&T won't derail those plans. Peggy Sexton, VP, product management at AT&T, said customers seek stability in IP. "They want the reliable, secure voice services they've had in the PSTN for the past 25 years," she said. To provide that, AT&T has invested in a SIP-based IP network running atop its MPLS infrastructure. It has also developed a VoIP interoperability lab in which network equipment providers can test their gear and make sure it works with other vendors' wares. AT&T is creating an applications framework to ensure that collaboration systems, unified messaging platforms and other communications programs slot nicely into the network. "It's mind-boggling how complex this can be," Sexton said, but users want applications to work and AT&T is obliged to make sure they do. "That's where we're getting to," she added. Lorena McCalister, director, VoIP marketing at Verizon Business, said her company hopes to attract all kinds of IP customers with a wide range of services: IP trunking to connect clients' existing IP-PBXs to the PSTN, IP Centrex for firms that want to try IP but don't want to buy all of the routers and switches to support it, and even TDM Centrex enhancements for companies partial to the older technology. "We're not in the business of providing cheap, low-quality voice," she said - a jab at consumer-focused VoIP providers like Vonage Holdings Corp. and Skype Ltd. Echoing comments from the other carrier representatives, McCalister said Verizon means to prove itself as a financially stable and flexible alternative to IP-PBX vendors. "We intend to map out a roadmap with you...only as your business wants it," she said. Pierce from Forrester said companies in certain industries are more likely to spend extra on IP deployments: chemicals and petroleum; construction and engineering; financial services and industrial services. She also said businesses are more likely to train staff members to monitor the IP systems and network, rather than hire an outside organization such as a carrier to perform that task. The observation matches that of a Yankee Group analyst concerning multi-national firms in Canada (NL Oct. 26/05). Carrie MacGillivray, a Yankee Group Canada analyst, said at a conference in Toronto last fall that companies such as Bell Canada, Rogers Telecom and Telus would do well to acquire more technology-specific businesses to compete against the multinationals' preferred data and IP provider, AT&T Corp. This was of the primary conclusions from The Yankee Group's Global Network Strategies Survey, which tracks multinationals' use of, plans for and challenges regarding worldwide connectivity.

US carriers forge ahead with IP despite customer reticence

News | March 15, 2006

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