Costs restrict IP telephony

Mainstream adoption of VoIP has been around the corner for years - so will it ever arrive?

Many firms still see no compelling reason to deploy any form of IP telephony over local or wide area data networks. The high cost of setting up IP systems and the continued availability of cheap, reliable calls over existing analogue systems are proving disincentives that are hard to overcome.

Analysts said IT managers should avoid installing voice over IP (VoIP) networks in isolation and should instead focus on developing a coherent converged communications strategy that marries voice and data, wired and wireless, and fixed and mobile technology.

United Biscuits, a firm which operates four networks linking multiple offices in different European countries, seems in a better position than most to take advantage of low-cost international voice calls with VoIP, but even it cannot yet justify the initial investment. IT director Mark Vickery said he may re-evaluate the business case for IP telephony next year, but believes the potential cost savings are currently not sufficient to justify upgrading his WAN links.

"We had a look at [IP telephony], but we just don't do a high enough volume of calls on an international scale to start using it. The economics just don't appear to be there," said Vickery, adding that some technicians in his IT department still have concerns over the technology's performance in terms of the latency and jitter that can affect the quality of IP calls across WAN links.

Wayne Churchill, UK managing director for virtual network operator Vanco, agreed that the high capital investment needed to migrate telephone systems remains a major deterrent for many IT managers.

"It is still hard to make a business case for IP telephony," he said. "Every bid we see, the customer wants the infrastructure to be IP telephony-ready until they see the cost."

A report released this week by research firm Butler Group predicts that most firms could and should eventually move to fully converged IP networks, but warns that deploying IP telephony alone will not realise adequate business benefits. Rather, IT managers should look at the bigger picture of integrating all of their voice, video and data applications over both fixed and mobile wireless networks to realise a maximum return on their investment.

"It will take five years before converged communications is commonplace but vendors risk losing their ability to compete it they focus on short-term cost-saving implementations," states the report.