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Optical/IP

Consortium to Spend $100M on VOIP

Here's some cheery New Year news for VOIP gear makers. An Israeli cable consortium, Hot Telecom Ltd., plans to invest $100 million in VOIP gear in an effort to break into the domestic voice market. It has issued requests for proposals (RFPs) to 20 vendors.

The consortium, comprising Golden Channels (41 percent ownership), International Television Holdings (Tevel) (32 percent), and Matav-Cable Systems Media (Nasdaq: MATV) (27 percent), was formed in November when the three cable operators, which already provide data and broadcast TV services, received telephony licenses. Now they plan to challenge national incumbent operator, Bezeq, in a voice market worth about $1 billion a year.

Hot Telecom CEO Ram Belinkov told the Jerusalem Post that 20 vendors, including Cisco Systems Inc. (Nasdaq: CSCO), Gallery IP Telephony Inc., NetCom Systems Ltd., Nortel Networks Corp. (NYSE/Toronto: NT), and Terayon Communication Systems Inc. (Nasdaq: TERN), have been asked to submit proposals. The vendors, which will be expected to provide end-user equipment as well as network hardware and software systems, have 60 days to respond.

The three operators plan to start integration in June and trial new services by September, with a view to beginning commercial service by January 2005, added Belinkov. Hot Telecom has already trialed VOIP with about 2,000 domestic and 200 business users as well as its own staff, using equipment from Gallery IP Telephony and Terayon.

The level and timing of the investment are key to Hot Telecom meeting licensing and regulatory requirements. Israel's communications ministry awarded the cable operators their telephony licenses under the condition that they will provide universal service to match that of national provider Bezeq within a few years. In addition, the country's competition commission is allowing the three companies to complete a full merger (due by December 15, 2004) under the condition that they start voice services by November 24, 2004, and that they jointly invest at least 350 million new shekels (US$79.6 million) in voice infrastructure by the end of June 2006 ($23.9 million by end of June 2004, a further $31.8 million by end of June 2005, and the remaining $23.9 million by end of June 2006).

Between them, the three cable operators have about 1 million customers, while Bezeq, in which the Israeli government holds nearly 50 percent of the shares, has about 3 million subscribers, though this number is falling.

— Ray Le Maistre, International Editor, Boardwatch

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techstud 12/5/2012 | 2:45:55 AM
re: Consortium to Spend $100M on VOIP
Does VOIP "works"? Answer is "depends". within enterprise: "may be", from home to the local office over the cable or over 802.11 link - "can be made to work", but as end to end general solution for day to day business communication -"barely".

I don't know when, but after all VOIP promoters will have to accept the fact that like circuit switching is a poor choice to route data, the packet switching is a poor choice to route voice. Of course, there are vested business interest that will never give up or accept defeat.

Did any body wonder why ILECs didn't rush to buy class 5 replacement switches despite all the advanatages of cost, and available infrastucture? Afterall, soft switches based class 5s have been available for several years. All these are used for testing the concepts, and other equipment in the lab (as a testing units - they VOIP switches are just fine, and thats what they should be classified, imho- test and measuring equipment).

VOIP, despite the hype, is inherently a poor solution for voice communication for long distance telephony. The call quality is extremely poor in most cases except over very short distances (don't give me crap results based on the Lab measurements where delays, latency, packet re-ordering, and impact of congestions, echo etc. are irrelevant).

VOIP is a cost effective solution only for cash starved teenagers, and students to make long distance calls using various toll-bypass methods over IP network. But, as a consumer technology it truly SUCKs - a lot of problems of echo, latency and variable bandwidth cannot be solved by the vary nature of packet switching. Any body who talks otherwise has not really experienced VOIP in a true carrier like environment.

So, I hope some day world will come to see the hype behind VOIP, and use it only in cases where it could be somewhat useful.
technonerd 12/5/2012 | 2:45:52 AM
re: Consortium to Spend $100M on VOIP Does VOIP "work"? Answer is "depends". within enterprise: "may be", from home to the local office over the cable or over 802.11 link - "can be made to work", but as end to end general solution for day to day business communication -"barely."
And if they make it work, what have they invented? Nothing special, and more importantly, nothing that will make much money. Look, if a customer can't save big bucks with VoIP AND get better functionality, this just isn't going to take off except in some niches.


Did any body wonder why ILECs didn't rush to buy class 5 replacement switches despite all the advanatages of cost, and available infrastucture? Afterall, soft switches based class 5s have been available for several years. All these are used for testing the concepts, and other equipment in the lab (as a testing units - the VOIP switches are just fine, and that's what they should be classified, imho - test and measuring equipment).
I couldn't agree more. This idea that somehow VoIP saves money is complete horse****! It is completely the other way around.


But, as a consumer technology it truly SUCKs - a lot of problems of echo, latency and variable bandwidth cannot be solved by the vary nature of packet switching. Any body who talks otherwise has not really experienced VOIP in a true carrier like environment.
Most techies of the data world have little understanding of, and even less appreciation for, the real-world requirements imposed by customers in the mass market. People won't put up with the kind of stuff that hobbyists and international toll bypassers will put up with.


So, I hope some day world will come to see the hype behind VOIP, and use it only in cases where it could be somewhat useful.
The only reason VoIP is getting so much attention is that we've seen a recovery in the NASDAQ, which as in 1998 is entirely a financial phenomenon driven by an extremely accommodative Federal Reserve. Now the Wall Street people and their partners in crime, the venture capitalists, see an opportunity to unload some of their dogs onto the perennial suckers, the mutual funds and the day traders.

The game begins anew. Ecclesiastes 1:9
PO 12/5/2012 | 2:45:52 AM
re: Consortium to Spend $100M on VOIP "VOIP, despite the hype, is inherently a poor solution for voice communication for long distance telephony. The call quality is extremely poor in most cases except over very short distances (don't give me crap results based on the Lab measurements where delays, latency, packet re-ordering, and impact of congestions, echo etc. are irrelevant)."

There is nothing inherently wrong with using packets to carry voice, any more than there is anything wrong with using Time Division Multiplexing to do so.

The only problem with VoIP is selecting the right options which it makes available. I would not use G.723 or G.729a for stressed calls (long distance, or prone to packet loss). Neither would I select PCM for cellular.

That doesn't mean that all networks and all choices are going to give good quality voice: many of us still remember when long distance calls sounded like a long distance call.

VoIP will happen once people stop expecting it to change the world overnight.
technonerd 12/5/2012 | 2:45:50 AM
re: Consortium to Spend $100M on VOIP Neither would I select PCM for cellular.
PCM is not a cellular technology, i.e., an air interface. PCM is what comes out of the back of the switch for transport in the (mainly) terrestrial feeder and fiber networks. If the switches exported voice encoded within IP instead, it would be a distinction without a difference done more for regulatory purposes than anything else.
aswath 12/5/2012 | 2:45:50 AM
re: Consortium to Spend $100M on VOIP Neither would I select PCM for cellular.

PCM is not a cellular technology, i.e., an air interface. PCM is what comes out of the back of the switch for transport in the (mainly) terrestrial feeder and fiber networks.

PCM can also be on the access loop, if the loop happens to be digital. This will be the case if it is T1 trunks for PBX or ISDN bothe Basic access and PRI. The point of the original poster, as I interpreted it, is to say that he will not use straight PCM on the sir interface because it requires more bandwidth than is available.
technonerd 12/5/2012 | 2:45:47 AM
re: Consortium to Spend $100M on VOIP PCM can also be on the access loop, if the loop happens to be digital.
That's correct, because in the case you've cited the switch is the PBX. I'm not sure if PCM originates there or in the ISDN phone sets.

is to say that he will not use straight PCM on the air interface because it requires more bandwidth than is available.
No one has ever used PCM over cellular. It's completely beside the point.
aswath 12/5/2012 | 2:45:41 AM
re: Consortium to Spend $100M on VOIP I'm not sure if PCM originates there or in the ISDN phone sets.

Even BRI phone encodes voice into PCM on the B-channel. If not how do you think the phone populates the B-channel bits?
technonerd 12/5/2012 | 2:45:40 AM
re: Consortium to Spend $100M on VOIP Even BRI phone encodes voice into PCM on the B-channel. If not how do you think the phone populates the B-channel bits?
Thanks for the information. It's not an issue I had thought much about until this discussion.
alchemy 12/5/2012 | 2:45:37 AM
re: Consortium to Spend $100M on VOIP VoIP doesn't necessarily mean poor voice quality. It's a matter of controlling QoS, minimizing dropped packets, delay & jitter, and picking a codec with reasonable audio fidelity.

Example PacketCable:
In the Cable environment, bandwidth is relatively inexpensive so the frame sizes are kept small (typically 10 milliseconds) and the codec is either vanilla G.711 (u-Law or a-Law PCM) or a high fidelity compression codec (they're standardizing on iLBC and BroadVoice-16). There are G.168 echo cancelers on both ends so any delay in the network isn't audible. On-demand, the CMTS is configured to poll the cable modem at 10 mSec intervals for upstream voice traffic (DOCSIS unsolicited grant service). Downstream, the CMTS class marks the flow and gives it high priority. IP headers use a special TOS in the IP header and the routers give VoIP packets priority over more plebian traffic.

A human can't tell the difference between a VoIP call and a circuit call in the PacketCable implementation.

Example Long Distance Backbone:
Most of the IXCs are in the process of converting their networks over to VoIP. They own the network and they have explicit control over all QoS issues. They use carrier grade media gateways. Their backbones are SONET rings where the voice traffic is kept (at least logically) separate from other traffic.

The only place where VoIP gets into trouble in QoS-managed networks is where it converts between VoIP and TDM several times in a call. Since VoIP uses echo cancellers, the audio stream is typically converted from PCM to linear to cancel the echo and then converted back to PCM. If you do this multiple times, you degrade the audio. It's even worse if you convert from compression codecs to PCM a couple times along the way. If you call from an IP PBX out to your ILEC or CLEC on a PRI line, use an IXC that has converted over to VoIP, and then hop off to another IP PBX, you'll get lousy MOS scores since you go through 3 echo cancelers and 3 PCM to linear conversions.
alchemy 12/5/2012 | 2:45:36 AM
re: Consortium to Spend $100M on VOIP Hot Telecom CEO Ram Belinkov told the Jerusalem Post that 20 vendors, including Cisco Systems Inc. (Nasdaq: CSCO - message board), Gallery IP Telephony Inc., NetCom Systems Ltd., Nortel Networks Corp. (NYSE/Toronto: NT - message board), and Terayon Communication Systems Inc. (Nasdaq: TERN - message board), have been asked to submit proposals. The vendors, which will be expected to provide end-user equipment as well as network hardware and software systems, have 60 days to respond.

Since Terayon and Gallery IP are both Israeli companies, it's hard to imagine that Cisco or Nortel will have much of a shot at this business. It's hard to imagine anyone but Terayon getting the CMTS or MTA part of the business. Gallery IP will get the softswitch business. AudioCodes has a media gateway and some slice of the RAD empire must have one. Comverse has voice mail. A local integrator would probably knock together a provisioning system. You could put together a reasonable solution using 100% Israeli content and start replicating it in the EMEA market.
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