I expect VoIP usage in NLD next year

Originally a doctor, Dr Elon A Ganor’s claim to fame is VocalTec, a pioneer
in the Internet and IP telephony business. A very strong and vocal proponent of
VoIP, Dr Elon, in an exclusive interview to Voice&Data, takes on some of the
beliefs and concerns about VoIP among operators, regulators and policy makers.

It is generally assumed that since VoIP is cheap telephony, the voice
quality you get through it is not as good as the traditional telephony. What do
you think?

I don’t agree that VoIP has to be cheaper. That’s not true. VoIP in some
situations provides better quality than PSTN telephony, so why should it be
cheaper? VoIP is being used by nimble players like Data Access to enter the ILD
market. And when a new player gets into the market, it normally drives down the
prices. That’s why VoIP is being offered cheaper than the existing tariffs of
the incumbent ILD carriers.

Also, there was a time when VoIP technology was developing and it did not
compare to PSTN in terms of quality of service.

Hence there was a tag on it of an inferior service at a cheaper price
vis-à-vis TDM telephony. But that was long back. Now, we have come a long way.
Today, VoIP at core is as good as any TDM core technology. It is time to move
on.

But that’s not the perception of just the common man, but of many
operators too...

Incumbents have to make a switchover in their mindset by starting to
consider the business case of increasing their profits in absolute dollar/rupee
terms by expanding the usage of telephony rather than retaining a higher margin
in a static market. Also, they have to introduce and aggressively promote the
value-added services that can be offered with existing or new technologies such
as VoIP.

Do you think that this is also a case of resistance to new technologies?

Let me give you an analogy. Usage penetration of computers is so rapid among
the new generation, that many are fast getting used to the computer for writing
down anything. Some people are already more comfortable with their computer keys
than the pen and paper. TDM is the pen and paper while IP is the computer. There
is always an initial resistance among users to any new technology. But people
soon get used to it. Some learn quickly, others follow.

For India, what kind of a time frame do you have in mind for acceptance of
VoIP to take place?

The telecommunications industry in India is full of very educated people. I
have never seen such talent and wisdom anywhere.

At first, some were reluctant to consider IP for telephony. But I am seeing a
change happening in their perception about VoIP.

Quite a few of them are now aggressively pushing the case of VoIP in their
organizations.

You are supplying to lots of carriers worldwide. What has been your
experience with Data Access?

About three months ago, if we were to go to people and say that Data Access
would capture 30 percent of the Indian ILD market, people would have laughed at
us. The growth of Data Access in the ILD market space using VoIP is a world
record.

Data Access is a story that proves to others that they can also do it.

If this is the success story with Data Access, surely you would have other
customers in India who would be moving fast on VoIP? Who else are you working
with?

Besides Data Access, the incumbent operators too have been doing VoIP. But
they have not been moving fast enough. For rest of the industry, we are talking
to the usual suspects.

Typically, what is the investment required for VoIP?

With just a few million dollars, Data Access have captured 30 percent of the
Indian ILD market. And for the second phase of expansion, it has struck a deal
of only $8 million with us. VoIP requires small investments. The time to money
is real short. Other major Indian telcos including the incumbents have a great
opportunity to use VoIP for rapid rollouts of their telephone services to meet
the teledensity target of the country and make rural telephony a reality.

How is China implementing VoIP for NLD–that is a very successful
example?

China is very unique in the sense that telecommunications is closely
controlled and synchronized by the government. One decision makes all the
difference. In the true sense, it is not a competitive market like India. Also,
China carries really no baggage. They don’t mind taking drastic decisions
about technology. In the rest of the world, especially in Western Europe, there
is a strong sense of protecting incumbent carriers. Even though the PTTs have
been privatized, a considerable share of the equity is still owned by the
Government. There is a vested interest working behind protecting the incumbent
operators.

However, I am very confident about India. There is a lot of action in the
telecom industry here. India is a highly promising market. It is not hit by the
global telecom crisis. And it is uniquely placed to take advantage of new
technologies to quickly provide good telecommunications services. The use of
VoIP for ILD is already on. I also see VoIP being used for

various other services. Also, I am positive that by 2004 there will be NLD
implementation using VoIP in India.

You seem to be very happy with VocalTec’s performance in India ? But
there areother bigger vendors who also offer VoIP products. Is your happiness a
little too early?

My client Siddhartha Ray of Data Access has gone on record saying that when he
evaluated VoIP vendors, he came across switch providers and router providers
providing also VoIP. VocalTec was the only company which was doing only VoIP. We
are precisely that. We are a high-value VoIP boutique.

Can you share with us some insight about what is the position of your
Class 5 VoIP switches?

We are working on it. Soon, there will be some product announcements. I won’t
be able to comment more at the moment.

Ibrahim Ahmad and Nareshchandra
Laishram