Thursday, October 14, 2004

VoIP Is The Next Internet Revolution

This year has seen a huge VoIP technology shift. VoIP is causing a smaller version of the economic boom similar to what the Internet caused in the 1990's. This tehnology revolution could greatly reduce expense and directly increase shareholder value within publicly held telecommunications companies. These gains have already been relaized to some extent within Level3 and Global Crossing. But what about the thousands of other RBOCs, ILECs, CLECs and rural telcos? Recent evidence suggests that there is a reluctance to change within the largely parochial telecom engineering community. This appears to be causing the US to lag behind most other countries in the world with regard to VoIP conversions. US telecom companies have been adding token VoIP systems to their networks, but have yet to perform a "Forklift" of their existing systems. There is a body of evidence to suggest that conversion to these newer technologies could achieve an order of magnitude in terms of expense reductions and shareholder ROI. So, the question arises "Why are they not converting older systems?"

Network equipment manufacturers, CISCO and Juniper, have solved the quality and reliability problems. I have heard the difference with my own ears. The technology even works well with legacy carrier systems. Why do these companies insist on maintaining older, very much more expensive systems?

The problem is not technical in nature. The VoIP switch and network equipment manufacturers do not seem to have project management teams as they did when they converted to the early Class 5 switches. Everyone from the smallest rural telco to the largest RBOC is in need of someone to hold the carriers' hands through a conversion to this new technology. The engineering staff in much of the industry is not IP centric and does not understand the basics of either telephony or Packet transmission. Professional Project Management may be the key. The solution lies in the management of projects, creating new products, redesigning outdated ATM and SONET networks, auditing current telephone switches, conversion to new technology, training and education of existing staff and converting older network management systems to newer and easier to maintain ones.

Where the previous revolution hinged upon the technology, the new changes will be brought about through project management. This Industry is in deperate need of a catalyst to pick it back up again. Investors are wary of a return of the corrupt practices of the largely shell telcos in the 1990s. These investors will return if they see a concerted effort on the part of boards and CEOs to re-define a company to meet the challenges of the new century.


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