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Cable Converges With VoIP - Broadcasting & Cable

Cable Converges With VoIP

Operators see potential revenue growth and an effective counter to telco threats
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This week, a host of VoIP (Voice over Internet Protocol) equipment manufacturers plan to introduce products at the NCTA National Show to help cable operators expand their VoIP-services business. Cedar-Point, Net2Phone, Camiant and Longboard, among others, will offer technologies that tie cellular phones to VoIP.

Michael Khalilian, chairman and president of the International Packet Communications Consortium (IPCC), is confident that 2005 is the year the triple play of telco, video and data services coalesce into a mature product offering. One major reason: VoIP technologies can now guarantee a quality of service that was previously unattainable.

And consumers are catching on. In 2004, global sales of VoIP-related equipment totaled $1.71 billion, a healthy 36% gain over 2003, according to Infonetics Research, an international market-research and consulting firm covering the data-networking and telecommunications industries. Its research found 1.1 million residential VoIP subscribers in North America in 2004 but predicts this number will reach 17.4 million by 2008.

Dave Spear, Cedar Point EVP, strategy and market development, says that, where cable operators were simply trying to match the phone company on price last year, now they want to enhance their offerings. Unified messaging, for example, lets subscribers check voice mail through their TV set or computer. They can also save call lists on their computer.

Falling Prices

It's also becoming cheaper for cable operators to provide those services since the average price for VoIP services is falling. Net2Phone, an outsourced VoIP provider to cable operators, says the cost of an IP-switching platform costs $55-$75 per subscriber line.

Also, the cost of an EMTA, an embedded multimedia terminal adapter that resides in the home and handles IP data, has fallen. Jeff Goldberg, chief scientist for Net2Phone cable telephony, says it now runs $65-$85, versus $140 only two years ago.

The average cost of CMTS (cable-modem termination system), which is located at the cable operator's headend, has remained stable.

“For some operators, we're willing to capitalize the cost of the platform by building it into the Net2Phone pricing model,” Goldberg adds. “That offloads some of the financial risk.”

One of Net2Phone's goals, Goldberg says, is to make the cellphone an extension of the TV experience and vice versa.

“We've already integrated the high-speed data connection with telephony in many of our features,” he says. “The focus of the triple play was to deliver voice, video and data through one pipe,” he says. “Now we're seeing the growth of the integration of all three.”

Spear says Cedar Point's Safari VoIP system will help introduce a host of next-generation voice applications at NCTA, including seamless mobility that would tie cellular services to WiFi in the home. By bringing those two technologies together, users would be able to move calls from cellphones to landlines to headsets without having to reconnect the call.

Reach Out to Business

Another opportunity Cedar Point is exploring is helping cable operators address business customers. This year, the company will set up an IP-based private-branch exchange (IP PBX), which is a telephone-switching system within a business. Unlike traditional branch exchanges, IP doesn't require separate voice and data networks. Instead, a single line supplies both voice and data services, reducing long-term operation and maintenance costs, which depend on the size of the client's business.

Because of business' larger amount of traffic, serving enterprise customers requires a cable infrastructure designed for those needs. Says Goldberg, “Business features like shared mailboxes, different dial plans and auto-attendant are all issues for business VoIP.”

Net2Phone and companies like Longboard are also heading to NCTA with plans to integrate wireless-phone services. Net2Phone will launch its next-generation WiFi phone, the XJ200, in a couple of months.

“Subscribers will be able to use one device for both cellular and WiFi connectivity,” says Goldberg.

So bright is VoIP's potential that non-VoIP companies are getting involved. Scientific-Atlanta, a set-top box maker, is offering a Passport electronic programming guide. It will have an interactive application that can be placed on the set-top box and can identify and display caller-ID information on the television. The viewer can even access a full history of previous calls as the video screen scales down to a quarter of the screen size. Date, time of call, phone number and caller ID are all displayed.

To stay competitive, Net2Phone is also working with a major set-top –box manufacturer for a service similar to Passport's new application.

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