Wednesday, September 22, 2004

Voice over IP The Answer For Telcom Shareholders

There is no other technologly or product that will return shareholder value as the newest generation of voice over IP telephone switches. These switches replace 100 year old technology, dramatically reduce operating expenses (including 10% or more reductions in workforce), and are the best hedge against the onslaught of cable telephony. Telcos should seriously consider rapid conversion and forklift of legacy telecommunications systems. Many companies had thought they could collect revenues from their outdated systems because these systems provided only POTS (plain old telephone service) and their customers did not require advanced features. VoIP has burst that bubble buy enabling any company with a little credit or capital to compete with even the largest of carriers.

Public telephone carriers that retain old technology such as Nortel DMS or Lucent 5ESS switches is costing shareholders significant return on their investment. These ancient technology switches must not be added to as some carriers have done, but must be fork-lifted out of the telephone company's central offices as soon as possible. Companies that fail to do so will be supplanted by very low cost carriers within the next 18 to 24 months. Any current telephone company customer with a cable modem or DSL connection will switch their service in a manner similar to the long distance frenzy of the 1980's and 1990's. Failure to upgrade to an IP infrastructure is tantamount to corporate suicide. Shareholders should demand upgrades to the telephone companies' telephone switches, transmission infrastructure, workforce education, billing systems, operational systems and network management systems. This is not an expensive prospect as it may seem.

Most companies are managed and staffed by persons not familiar with and even frightened by this new technology. It is critical that these groups be re-trained for this brave new world of telephony. Teliserve is a consulting concern that can re-train internal staff and relieve a company of its internal reluctance to evolve. Teliserve will train and educate management, engineers, accounting personnel, customer service representatives, installers and maintenance crews.

While IP technology is considered black magic by some senior executives, network equipment manufacturers such as Cisco and Juniper have mastered the protocols and technologies that are necessary for creating reliable and cost-effective network infrastructure. The new paradigm will evolve over time to incorporate this IP technology as the sole means by which telcos deliver service to business and residential customers. ATM and SONET have proven too expensive and limiting as core transmission technologies. IP technology is an order of magnitude less expensive in every category, and is now just as reliable as ATM and SONET protocols. Conversion to an IP core transmission technology along with adoption of the latest ADSL standards and voice over IP delivery service could be the greatest single method for a significant increase in competitive advantages.

TeliServe is a telecommunications service company that can coordinate all aspects of defining target markets and products, technical definition, network product evaluation, equipment procurement, staff adjustment, education, technical training, network management tools, billing system and financial system integration, maintenance and support. Teliserve has teams of experienced financial, operational and technical resources who can reduce a telco's risk for conversion.

Contact R.J. Walker at for more information


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