Cable operators are expected to provide VOIP phone services to more than 600,000 subscribers by the end of the year and they'll rope in 15 million new phone customers in the next five years, according to a new research report by Kinetic Strategies Inc. Kinetic says early results from cable operators show they are positioned to pitch VOIP as a replacement for primary lines.
The cable operators are more aggressively pushing their VOIP services to compete with such startups as Vonage Holdings Corp. and the incumbent telephone companies, says Michael Harris, founder and president of Kinetic. Those providers collectively have about 300,000 VOIP subscribers.
For the near term, cable operators will provide VOIP service using PacketCable network control system (NCS) technology, a basic digital replacement for the plain old telephone service. In the next couple of years, cable operators may use the PacketCable Multimedia (PCMM) architecture, which will allow them to provide roaming VOIP services to consumers.
PacketCable, a project managed by Cable Television Laboratories Inc. (CableLabs), helps vendors build interoperable equipment that uses IP technology on cable networks. Cable operators have built PacketCable from the ground up to either meet or surpass the quality of the public switched telephone network (PSTN). The end result will be a world where cable operators exchange voice traffic on their IP networks without handing off calls to the PSTN.
Startups such as Vonage and 8x8 Inc. (Nasdaq: EGHT), as well as carriers such as AT&T Corp. (NYSE: T), use session initiation protocol (SIP) to provide VOIP services. These VOIP services can work over any broadband connection, providing the portability that current cable offerings lack. But because service providers don’t have control of the underlying network, Kinetic asserts that these services may not be as reliable as those provided by cable operators.
Cable operators are also looking at SIP, but they see it as an added service, not a replacement for PacketCable technology, Harris says. Further down the road, they could offer SIP-based roaming services to PacketCable NCS customers. To extend PacketCable into a more general IP platform, CableLabs introduced PCMM in June 2003 (see CableLabs Issues PacketCable Spec). Ongoing testing of this technology is expected to continue for a couple years.
Kinetic says Charter Communications (Nasdaq: CHTR) is conducting a small-scale ISP services trial in an undisclosed location and Comcast Corp. (Nasdaq: CMCSA, CMCSK) is conducting a SIP lab trial. Kinetic doesn’t expect PCMM or SIP deployments by the biggest cable operators for at least another year.
For now, cable operators are getting accustomed to the basics of the IP telephone business -- and even that is winning loads of business. “This is a case of putting one foot in front of the other. Cable operators want to first provide consumers with plain vanilla offerings,” says Harris.
— Joanna Sabatini, Reporter, Light Reading
For more on this topic, check out:
- The Light Reading Insider reports:
— VOIP: The Enterprise Options
— Deconstructing VOIP
- The Heavy Reading reports:
— VOIP: A Comprehensive Competitive Analysis of Media Gateways
— VOIP: A Comprehensive Competitive Analysis of Softswitches
For further education, visit the archives of related Light Reading Webinars:
- Carrier VOIP: How to Build Reliable Networks
- Infrastructure Requirements for Enterprise VOIP
- The Future of Voice, Video, and Data
- Key Softswitch Characteristics for Migrating Class 5 Infrastructure to VOIP
- Key VOIP Migration Strategies and Tactics for Service Providers