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Cable/Video

Japan Dominates VOIP Over DSL

Voice-over-broadband services may be one of the hottest topics in telecom right now, but according to specialist research firm Point Topic Ltd., there are just 5 million people in the whole world signed up to such services (see Report: Yahoo Japan Dominates VOIP).

And most of them are in Japan, courtesy of Softbank's Yahoo Broadband service. At the end of June 2004, more than 4 million Yahoo Broadband customers, about 94 percent of its total DSL base, were using its packetized voice service.

That's in stark contrast to nearly all the other 1,000 or so voice-over-broadband service providers, which, according to Point Topic, have hardly any customers.

So, other than Yahoo Broadband, which operators have notched up some early gains? The table below shows that three of the other top five players are in Europe -- Sweden's Bredbandsbolaget AB (B2), France's Free, and Italy's FastWeb SpA -- with only Vonage Holdings Corp. and Cablevision Systems Corp. (NYSE: CVC) flying the flag for North America.

Table 1: 2Q04 Subscriber Numbers for Six Leading VOIP Operators
Operator Subscriber numbers Date
B2 (Sweden) 50,000 July 2004
Cablevision (USA) 115,050 June 30, 2004
FastWeb (Italy) 300,000 September 2004
Free (France) 330,000 June 30, 2004
Vonage (USA) 200,000 July 2004
Yahoo Broadband (Japan) 4,038,000 June 30, 2004
Total 5,033,050
Source: Point Topic Ltd.




But what about Korea? Despite having the greatest broadband penetration rates in the world (nearly 30 percent of all households), and some outrageous access speeds (some up to 100 Mbit/s), it seems that voice over broadband is not in evidence. Yet.

Point Topic's John Bosnell says market regulation has held back Korea's voice-over-broadband market to date, but with the country's regulator recently announcing a VOIP numbering scheme, it seems poised to take off. In addition, the current lack of flat-rate telephony tariffs make Korea "an attractive market for VOIP providers. I would certainly expect to see some Korean operators included the next time we do this list."

Elsewhere, Bosnell expects to see further growth in the U.S. as the major cable operators and traditional carriers build on their current VOIP offerings, while he expects Vonage to continue expanding its customer base.

He also expects Free, a growing thorn in France Telecom SA's (NYSE: FTE) side, to continue its impressive growth (see Iliad Ramps Up Broadband to the Homer). Bosnell says voice over broadband has been driven by "operators that have embraced local loop unbundling, and priced their services very low. If their prices are sustainable, then France should also see good growth in 2005."

Free's success has come from offering VOIP as part of a triple-play package, along with video and Internet access, and it's as part of those sorts of bundles that Bosnell sees the service taking off, especially as it becomes easier and cheaper for service providers to add packetized voice capabilities to their existing systems.

He warns, though, that not every country offers the right conditions for growth. Each national market "has different regulation, historical telephony tariffs, and other factors that can mean the difference between VOIP being a roaring consumer success and being a niche product for enthusiasts or very heavy telephone users."

— Ray Le Maistre, International News Editor, Light Reading

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issey 12/5/2012 | 12:58:44 AM
re: Japan Dominates VOIP Over DSL The reaearch paper probbaly also missed out at least 1 million Fusuion Communications VoIP subscribers..
issey 12/5/2012 | 12:59:34 AM
re: Japan Dominates VOIP Over DSL I cannot say anything more than I have unless it is vague.
SB YBB is one big provider and thus have control of their big national network.

QOS between YBB sub <---> YBB sub. can be guranteed.

QOS between YBB sub <----> PSTN. can be guranteed.

QOS between YBB sub <----> xxx sub on another provider using 050-xxxxx number, can be guranteed depending on their agreements, but should be OK.
flipper 12/5/2012 | 12:59:38 AM
re: Japan Dominates VOIP Over DSL Thanks.
In the market segment that I operate, the 64 up/ 256 down is the most preffered access rate for the SME. Hence my concern about QoS, congestion etc. In the small bit of testing I have performed a file transfer can severly impact a call at these speeds, rendering it unacceptable for business.
I appreciate the background on Y!BB.
flipper 12/5/2012 | 12:59:38 AM
re: Japan Dominates VOIP Over DSL Issey,
I thought I was a techie.
The Internet and its associated providers are not required to implement any TOS / dscp honouring schemes that will provide prioritisation for traffic transitting their systems or egressing interfaces. The Internet is best effort. My understanding is that the bulk of Internet interfaces are FIFO.

Unless the provider who administers the local access (as this is a likely point of congestion) applies QoS techniques then the downstream can still be congested by aggressive applications. The same can be said of file transfers upstream (common for SME's) unless all traffic must transit the SIP adapter and be policed/queued there.
My question does not relate to the ability of the SIP adapter being able to support TOS, more to how can any provider offer a business grade service, when they can not control what traffic may be destined for the end users LAN segment nor gaurentee delivery or priority on the Internet.
Do you know how this is done for business customers of Softbank(YBB)?
issey 12/5/2012 | 12:59:44 AM
re: Japan Dominates VOIP Over DSL Are you guys techies or not ?

Of course there is QOS, the Trio Modem prioritises the VoIP packets ahead of data as well as actually marking the TOS bits for in those voice packets, so that once it hits the diffserv domain, the Ciscos are able to handle it.
nbsherid 12/5/2012 | 12:59:50 AM
re: Japan Dominates VOIP Over DSL > Any one with experience in VOIP over DSL for business able to define the impacts to the quality of the call when the DSL service is also being used for business Internet transactions. Particularly file transfer and web.
I am concerned that it would be impacted due to lack of QoS.

But at 6-8 Mbps wouldn't the effect of that interference be significantly reduced, compared to say 256-512 kbps? It would only be very demanding FTP sessions that might affect it. The contention would be most affected at the access, but the access pipe is probably enough for most people anyway.

Y!BB has been successful because of a very clear value proposition but it has primarily focussed on reducing costs significantly to attract market share rather than other factors. At one third the price of dial-up services, with mostly free P2P calls and cheap worldwide rates, most people (tech and non-tech) would see that it is saving them bundles of money. And free P2P calls would help to promote word-of-mouth and "sign up your friends" marketing.
flipper 12/5/2012 | 12:59:55 AM
re: Japan Dominates VOIP Over DSL Any one with experience in VOIP over DSL for business able to define the impacts to the quality of the call when the DSL service is also being used for business Internet transactions. Particularly file transfer and web.
I am concerned that it would be impacted due to lack of QoS.
issey 12/5/2012 | 12:59:55 AM
re: Japan Dominates VOIP Over DSL Nothing I have said so is confidential or proprietry, so I will intend to keep it that way. One final point is that Softbank were willing to plough money into its YBB project. It has been nearly 5 years and SBB has been losing money for those years, but the losses have narrowed over time and soon it would be negligable. They actually broke operating even at around 2.5 million subscribers. They are also majors Shareholders Of Yahoo Japan. You will notice that the earnings of Yahoo Japan have been rising dramtically for the past 4 years.. thus their share prices, bit of a financial fudging as they say, put costs onto SBB but earning/profit into Yahho Japan. Also SB have many investments they are full of cash it seems. SO I hope people get to see the picture, it is not all Governnment involvment and NTT opening up their loines, it is also SBs aggressive visions & plans and super marketing..
issey 12/5/2012 | 1:00:10 AM
re: Japan Dominates VOIP Over DSL Even though people have a POTS service, the key to VoIP being successful, is because it costs very little to add VOIP to the TRIO DSL modem, and calls are free within YBB network which covers all of Japan..
Competition in Japan is very intense in Japan.. between all providers..
050-xxxx numbers are now alloocated to VoIP services..
The figures from Point do not include NTTs own VoIP services... so I would put the figure near 5 milion for Japan..
issey 12/5/2012 | 1:00:10 AM
re: Japan Dominates VOIP Over DSL jonathanrichardson...
Actually the POTs argument is not an argument at all. Nearly all DSL connections in Japan are on Type 1 line, that is you get a POTs service from NTT too.. Type 2 is the dry copper type. With new competition, SBB will connect that type 2 line to Japan Tel Switch, maybe through a NG DLC from UTstarcom!
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