Hosted VoIP

The major outage that left Skype’s (News - Alert) 220 million users unable to make inexpensive phone calls over the Internet in mid-August 2007 has spurred many major carriers, service providers, network operators, etc., to extol the advantages of using more established, recognized telco players.

For example, Yours Truly recently spoke with Vikram Saksena, CTO of Sonus Networks (News - Alert) (www.sonusnet.com) about Skype’s “Internet voice” traffic versus the “IP voice” offered by carriers.

"Just to get the terminology straight, 'Internet voice' is typically used to describe the kind of model Skype uses, which is mostly a PC-to-PC, softphone-to-softphone scenario," says Saksena. "This model employs the Internet for transport, because Skype doesn't own any infrastructure itself. Basically, all you have is two endpoints that connect via the internet, and the only added feature is a directory or database that allows people to locate and connect to each other over the Internet."


“On the other hand, the ‘IP voice’ carrier offerings are based more on a model where the endpoint dials into some kind of a carrier infrastructure and that in turn applies services and then completes the call toward the destination,” says Saksena.

“In terms of differences, from a network perspective, carriers generally run their service on a solid, carrier-managed infrastructure,” says Saksena, “It’s not just the Sonus-like components — the softswitches and media gateways — but also the IP network that is used for this kind of communication. It’s all managed with quality of service [QoS] and capabilities that allow you to give every consistent level of performance across different periods of time.”

“One example is that your voice traffic is explicitly recognized in these carrier-managed networks and they’re given a higher priority treatment over the other forms of data or video traffic that might be going on the same IP network,” says Saksena, “and that allows carriers to control the latency, which is a key aspect, and also phenomena such as packet loss and jitter, all of which affect the user experience of a voice call.”

“There are all kinds of services that carriers provide,” says Saksena, “such as conferencing and three-way calling and call hold and things like that. They vary from simple services for consumers to sophisticated private network services for business users that require intelligence in the network, which the carriers provide. In the Skype model, however, none of those services exist, because it merely establishes a ‘plain vanilla’ phone call from Point A to Point B. Skype doesn’t have any network-based intelligence other than a directory of users to basically intercept the signaling and apply any kind of services to that. It works only because in most cases all you’re looking to do with Skype is place a cheap phone call, as many consumer want. But in more sophisticated environments, especially business users, where services are critical, or even in consumer environments where people want these kinds of services, the Skype model actually ‘doesn’t fly’ very well. So, that’s basically the application angle and QoS angle to the story.”

“Finally, particularly in the case of international calls,” says Saksena, “I think Skype takes advantage of the fact that the Internet gives its users complete end-to-end IP connectivity, whereas in the case of the carriers, typically you ‘go IP’ within a carrier’s network but, today at least, when you go beyond the carrier’s boundary into a different country or some other part of the world which is not administered by that same carrier, you typically end up hitting the PSTN network. That’s where the PSTN toll-charges apply, since you start to encounter call termination fees. For example, if you use AT&T’s (News - Alert) network, you travel over IP only as far as their network borders, and if you’re calling to somewhere in, say, Asia, your call would hop on to some PSTN connection somewhere there to complete the call. That invariably requires various charges, making the call more expensive in a national sense, whereas Skype actually has a benefit here because the call simply travels over the Internet from one endpoint to the other.”

“That model is slowly changing, however,” says Saksena, “So, what’s happening in the carrier networks is that, as everybody deploys their own IP voice network, they’re starting to interconnect using things such as Sonus’ network border switch, in which case the call is going farther and farther as an IP call, and not really immediately hitting a PSTN gateway. As more proliferation of services and technology occurs on IP voice networks, you’ll see arise the model where you can make an IP voice call end-to-end like Skype, but now on a set of carrier-managed networks. The pricing of that will probably be a flat-rate, ‘all you can eat’ type of plan, where you don’t really pay any permanent toll charges like you do on the PSTN. As more and more carriers deploy IP voice, as we do here at Sonus, then I believe that the business model enabling Skype to bypass international tariffs and pricing will disappear over time.”

“If you add a high quality of service, add applications and services, and you take away the cost advantage of end-to-end IP connections, then it becomes questionable whether the value of an Internet-type phone call, as opposed to a carrier-provided voice service, will continue to be advantageous to Internet guys such as Skype,” says Saksena.

“Don’t get me wrong, there’s certainly a market for Skype today,” says Saksena, “Millions of people use it. But much of that call traffic consists of international calls. The reason few people use it within the borders of a country is because the telco pricing has become very cheap, so there’s no advantage to using Skype over short distances.”

Saksena’s own company, Sonus Networks, is itself a global provider of wireless and wireline VoIP and multimedia infrastructure solutions for carriers, PTTs, ISPs, cable companies, CLECs and next-generation service providers. Their products can be found in areas such as residential and business voice over broadband (VoBB), wireless voice and multimedia, trunking and tandem switching, carrier interconnection and enhanced services.

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Richard Grigonis is an internationally-known technology editor and writer. Prior to joining TMC (News - Alert) as Executive Editor of its IP Communications Group, he was the Editor-in-Chief of VON Magazine from its founding in 2003 to August 2006. He also served as the Chief Technical Editor of CMP Media’s Computer Telephony magazine, later called Communications Convergence (News - Alert), from its first year of operation in 1994 until 2003. In addition, he has written five books on computers and telecom (including the Computer Telephony Encyclopedia and Dictionary of IP Communications). To see more of his articles, please visit his columnist page.