can voip replace “legacy voice” in asia? steven rago principal analyst, isuppli corporation

Can VoIP Replace “Legacy Voice” in Asia?

Steven Rago

Principal Analyst, iSuppli Corporation

VoIP in Asia – 2 Copyright 2000-2004 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending

Agenda

VoIP Overview

VoIP is not a single application

VoIP vs. Legacy PSTN Technolgoy

Requirements, Advantages & Issues

Advanced Feature

Successes in Asia

Broadband access ‘Foundation of Residential VoIP’

Types of Broadband technologies

Broadband penetration in Asia

Can Broadband sustain growth

VoIP potential in Asia

VoIP drivers in Asia

Forecast residential VoIP

VoIP “DSP” Opportunities

Summary


VoIP Overview- not a single application

VoIP Application Market

VoIP over Broadband…………..Residential xDSL, Cable, Ethernet first mile, WiMAX,… Competitive or supplementary service for traditional voice

VoIP PBX……………………………EnterpriseConvergence of voice and data in the enterprise

VoIP “IP Centrex”………………Enterprise PBX IP services offered by Service providers

VoIP Virtual Pvt. Networks…..EnterpriseEnterprise networks with converged voice and data, may be managed by the PTT, ILEC, IXC

VoIP Linking Switches…………Service Provider Long haul transport of voice utilizing packet technology

VoIP Public Internet……………Residential (IP voice over Internet)Use voice over public internet services for long distance calling


VoIP vs. Legacy PSTN Technolgoy

SS 7Network

Class 5 Circuit Switch



Legacy PSTN

Call Signaling Call Sig

naling

Analog Telephone

Voice-IPGatewayCall signaling

IP RouterIP Router

IP Router

IP Router

SoftSwitch

MediaServers

Analog Telephone

Broadband pipe

residentialGateway

SIP phone

Analog Telephone

IP MPLS Network

VoIP-Requirements, Advantages & Issues

Analog Telephone

residentialGateway



VoIP over Broadband Residential Service

Requirements:

Always on Broadband connection

Voice quality “better then

cellular” Instant dial tone

every time (non blocking) No dropped calls

Advantages:

Less expensive to deploy

Soft Switches vs. Circuit switch

offices Statistically Multiplexed vs.

TDM Richer suite of applications



Issues:

Quality of:

Service!!!!

Voice!!!!

Line power

Emergence call (ie 911)

Security

Country’s

wire tape for law enforcement


VoIP Advanced Feature

Number portability

Telephone number no longer tied to specific location

Single message center for both email and voice

Can enhance with text to voice

Distinctive Ring and other features based upon IP address

Multiple IP address can address one

residential gateway

For enterprises: Enhances call center operations

Residential gateway can make decisions on how to direct outgoing call to PSTN circuit switched for high quality call

to VoIP packet switched for low cost


VoIP - Successes in Asia

Japan’s Growth in fixed line VoIP subscribers

-

5,000

10,000

15,000

20,000

25,000

2002 2003 2004 2005 2006 2007 2008

Su

bsc

rib

ers

in M

illi

on

s

0%

5%

10%

15%

20%

25%

% V

oIP

to

fix

ed l

ine

voic

e su

bsc

rib

ers

BB Subs.

VoIP Subs.


Broadband access ‘Foundation of Residential VoIP’

Types of Broadband technologies ADSL:

Fastest growing of Broadband access technologies Offered by incumbent and competitive fix line service

providers 16-24 Mbps down stream at 3K feet Voice over Ethernet (VoIP) over AAL-5 ATM

Cable Modem: Dominate Broadband technology in NA Defined standards for Toll quality Voice – VoIP MSO in US offering VoIP over cable modem

FTTx-LAN: Strong growth in China Could become backbone for VoIP services

WiMAX: Wireless broadband technology Reach up to 15Km Could become a candidate for VoIP services to rural areas


Broadband-Penetration in Asia

Broadband households as percentage of total households in Asia

0%

10%

20%

30%

40%

50%

60%

2002 2003 2004 2005 2006 2007 2008

Asia (HK, Taiwan , Singapore, Australia)ChinaJapanKorea, RepublicRest of Asia

Potential Strong Mkt

for VoIP services

Critical Mass


Can Broadband sustain growth?

-

20

40

60

80

100

120

140

2002 2003 2004 2005 2006 2007 2008

Millions of BB Subscribers

Mil

lio

ns

of

BB

Su

bs

cri

be

rs

Asia Developed (HK, Taiwan , SIngapore) China

Japan Korea, Republic

Rest of Asia

CAGR = 32%


VoIP Drivers in Asia

Asia is prime for VoIP Services

Expensive Local Phone Tariffs (metered services)

High cost of long distance services coupled with strong demand

Significant levels of broadband penetration

Low tele-density in many nations in the region

Success of VoIP in Japan

Minimal expectations for voice quality, availability,…

More competition among service providers then Europe or NA.

Absence of any major installed base of legacy phone equipment in many nations


Forecast residential VoIP

….

-

5

10

15

20

25

30

35

40

2002 2003 2004 2005 2006 2007 2008

Mil

lion

s o

f V

oIP

Su

bs

crib

ers

Asia Developed (HK, Taiwan , SIngapore) China Korea, Republic Rest of Asia

CAGR ’03-’0

8 = 76%

VoIP Subscriber Growth in Asia wo Japan


VoIP “DSP” Opportunities

Node in VoIP Network Technology and function

Soft Switch Generic Computer with Telephony Software (no DSPs in Soft Switch)

Provides: Call control, Telephone number translation, Advance

features, Service registration

Voice/IP Gateway Either DSP technology or ASSP designed for multiple channels

of to IP conversion

Provides: Terminates/initiates signaling with Class 5 switch, Encodes and compress voice

data, Generates IP packet, Latency compensation-Echo

cancellation (major DSP function)

SIP Telephone ASSPs that perform all the phone functionality including protocol

stacks DSP is core in ASSP


Summary

Asia is a prime market for VoIP technology

China is expected to pass Japan as the number one market for residential VoIP by 2006

Demand for soft switches and Gateways will become significant by mid 2005

The market for SIP phones in the residential space will be minimum while residential broadband gateways will be significant

Not all is smooth for VoIP there are several hurdles to overcome, however iSuppli sees a bright future.

can voip replace “legacy voice” in asia? steven rago principal analyst, isuppli corporation

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