WTPF WTPF –– 20012001On IP TelephonyOn IP Telephony
(Seminar in Niamey, April 2001)(Seminar in Niamey, April 2001)
Note: The views expressed in this presentation are those of the author and do not necessarily reflect the opinions of the ITU or its membership.
Saburo TANAKACouncellor, TSB/ITU
2WTPF WTPF -- IP TelephonyIP Telephony
AgendaAgenda
l Overview of WTPF ð Purposeð Agenda for WTPF
l What are the issues?ð What is IP Telephonyð Opportunities and challengesð Policy and Regulatory issues
l What will be the impact of IP Telephony? ð In developed countriesð In developping countries
l Results of WTPF
3WTPF WTPF -- IP TelephonyIP Telephony
Overview of WTPFOverview of WTPF(Held in Geneva from 7(Held in Geneva from 7--9 March 2001)9 March 2001)
l Purposeð To provide a forum for discussion and for exchange
viewsð WTFP shall not produce prescriptive regulatory
outcome but prepare reportPurpose
l The agenda of the WPTFð The general implication of IP Telephonyð Actions to assist Member States & Sector Members to
facilitate adaption to the new environmentð Action to assist MS & SM in meeting the human
resource development
l Attendance ð WTFP was attended by 757 persons (121 MS including
25 LDC, 99 SM)
4WTPF WTPF -- IP TelephonyIP Telephony
What is IP Telephony?What is IP Telephony?l Definition
ð IP Telephony: a generic term for the transmission of voice, fax over packet-switched IP-based networks
ð Voice over IP: The transmission of voice over circuit employing Internet Protocol
ð Internet Telephony: Transmission of voice over the Internet
A wide variety of services can be provided using combination of: the type of terminal devices used, where the gateways are located and the underlying means of transmission. WTPF had only “working definition” and it requested ITU-T to define more clear definition on “IP Telephony” and “Internet Telephony”.
A call from the GSTN to an IP terminal
GSTNIP network IP access
H.323.POP(Gateway)
Normally a local call,
handled by Telco A
International geographic part of the call. There is no 1 to 1correspondance to normal PSTNdistance
International geographic part of the call. There is no 1 to 1correspondance to normal PSTNdistance
International boundary
Carrier Domain
IP-Based network domain
T 0 2 0 8 5 0 0 - 0 0( 1 0 6 1 4 7 )
I P N e t w o r k
IW F
T e r m i n a t i n gN e t w o r k
L o c a l o r d i s t r i b u t e df u n c t i o n C a l l i n i t i a t e d f r o m P S T N / I S D N / P L M N
t o P S T N / I S D N / P L M N
P S T N / I S D N/ P L M N
IW F
P S T N / I S D N/ P L M N
L o c a l o r d i s t r i b u t e df u n c t i o n
O r i g i n a t i n gN e t w o r k
Call from International Telecommunication Network (ITN) to another ITN via IP-based Network
T0208480-00
IP Network
IWF
H.323 or SIP[1]terminal
IPAccess
Local or distributedfunctionCall initiated from IP Network
to PSTN/ISDN/PLMN
PSTN/ISDN/PLMN
(106147)
Call from IP Network User to the ITN
T0208490-00
IP Network
IWF
H.323 or SIPterminal
IPAccess
Local or distributedfunction Call initiated from PSTN/ISDN/PLMN
to IP Network
PSTN/ISDN/PLMN
(106147)
Call from ITN to an IP-based Network user
T0208510-00(106147)
IP Network
IWF
H.323 or SIP[1]terminal
IPAccess
Local or distributedfunctionCall initiated from IP Network
to PSTN/ISDN/PLMN
PSTN/ISDN/PLMN
H.323 or SIPterminal
IWF
IP Network
IPAccess
Local or distributedfunction
Call from an IP-based Network user to another IP-based Network user via an ITN
1. Computer to computer1. Computer to computer
l Needs similarly equipped Internet users (e.g., IP telephony software, multimedia PC etc), both logged-on simultaneously
l Main motivation: avoidance of usage-based telephone charges
l Software vendors include VocalTec, Camelot etcl Market: Less than 15 million potential users?
Internet
Phone Gateway Computer Phone Gateway Computer
2a. 2a. Computer to Computer to telephone or telephone or faxfax
l Suitably equipped Internet users able to call any telephone user (not necessarily vice versa)
l Main motivation: Reduction of international telephone charges
l Service providers include IDT (Net2Phone), FWDl Market potential : Sending <15 million equipped
users, receiving >800 million telephone users
Phone GatewayComputer
TelephonePublic Switch
Internet
Desktop PC
2b. 2b. Computer Computer to service to service provider provider telephonetelephone
l Suitably equipped Internet users browse Website and choose voice/video connection option
l Main motivation: Service provider can interact directly with potential clients, via voice or other electronic means
l Market potential: Integration of sales-oriented web site and telemarketing. Pornography, Gambling ...
Web Server
Public Switch
Internet
Desktop PCPhone GatewayComputer atService Provider
3. Telephone 3. Telephone to telephone to telephone (fax to fax) (fax to fax) via Internetvia Internet
l Any telephone user to any otherl Main motivation: Accounting rate bypass, market
entry for non-facilities-based carriersl Potential service providers include any PTO with
settlement payments deficit (e.g., US = US$5.7bn)
l Market potential : 850+ million telephone users
Telephone TelephonePublic Switch
Internet
Phone Gateway Computer
Phone Gateway Computer
12WTPF WTPF -- IP TelephonyIP Telephony
Opportunities and challengesOpportunities and challenges
l Opportunities ð Unifying platform for emerging converged networkð Reduce prices to consumers and the costs of market
entry for operators ð In terms of volume of traffic carried and level of
investment committed
l Challenges ð Undermine the pricing structure of the incumbent
Public Telecommunication Operators (PTOs)ð Transition to IP-based networks also poses significant
human ressource development challenges
13WTPF WTPF -- IP TelephonyIP Telephony
IPIP--based networks = the technology based networks = the technology of choice?of choice?
l Several major PTOs will migrate all their international traffic onto IPð The apparently lower cost of moving traffic over
IP-based networkð Necessity in the age of the Information Societyð May serve as a dynamic stimulus to economic
growthð To offer much wider and diverse range of multi-
media services and innovative applications
l But how about for developing countries? ð No answer, study requested to ITU-T
The influence of IP Telephony on priceThe influence of IP Telephony on price
l IDC forecasts that “Web Talk” revenues will reach US$16.5 bn by 2004 with 135 billion mins of traffic
l Gartner Group forecast that IP Telephony and competition in Europe will reduce prices by 75% by 2002
l IP Telephony as % of all int’l calls in 2004ð Tarifica forecast 40%ð Analysys forecast 25%
l In developing countries, the majority of IP Telephony calls are incoming Source: IDC.
0.208
16.5
2000 2004
“Web Talk” revenues, US$bn
Minutes of use by month, Minutes of use by month, Hongkong SAR ('000s)Hongkong SAR ('000s)
Source: OFTA (www.ofta.gov.hk)
0
250
500
750
1'000
1'250
1'500
498
698
898
1098
1298
299
499
699
899
1099
1299
0200
Dial-up Internet (via PSTN)
International voice (incoming and outgoing)
Deutsche TelekomDeutsche TelekomPercentage change in call Percentage change in call volume (minutes) 1998/99volume (minutes) 1998/99
-7.1%
Domesticlong-
distance
-2.1%
Int'loutgoing
calls
7.2%
Local calls
36.0%
Calls tomobile
networks
86.3%
Calls toInternet (T-
Online)
Source: Deutsche Telekom annual report.
DialDial--up Internet traffic as % of up Internet traffic as % of total traffic minutestotal traffic minutes
38%
27%19.5%
8.5%
18%12%
0%
5%
10%
15%
20%
25%
30%
35%
40%
1998 1999
Telia (Sweden)
Telecom Portugal
Telenor (Norway)
Source: PTO annual reports. Note: For Telia, Internet traffic as % of local minutes. For others, as % of total
Infrastructure capacity and costs, Infrastructure capacity and costs, TransAtlantic cables, 1988TransAtlantic cables, 1988--20012001
Source: ITU, adapted from FCC.Note: Circuit costs assume a usage level of 18%, a compression level of 5:1 and a life-time of 20 years.
1
10
100
1'000
10'000
TAT-81988
PTAT-11989
TAT-101992
TAT-12/131996
AC-11999
TAT-142000
FlagAtlantic2001
Cir
cuit
cost
p.a
. (U
S$)
1
10
100
1'000
10'000
100'000
Cir
cuit
cap
acity
(64
kbit/
s, 0
00s)
Circuit capacity, rising by 89% p.a.
Circuit costs, falling by 72% p.a .
+0.28 US$
Receives 0.30 US $ for terminating charge
Pays 0.02 US $ for local call.
Retains 0.28 US $
0ISP in
Developing country
-0.53 US$Receives US $ 0.02 local call charge.
Receives US $ 0.55 settlement.
PTO in Developing
country
+0.25 US$
CollectUS$ 1.00 from user
Pays US$ 0.30 to ISP for terminating call.Retains US$ 0.70
Collect US$ 1.00 from user
Pays US $ 0.55 settlement.
Retains US $ 0.45
PTO in Developed
country
DifferenceIP-TelephonyAccounting Rate
ChallengesChallenges
Revenue gain and revenue loss
20WTPF WTPF -- IP TelephonyIP Telephony
Different Policy and Regulatory Different Policy and Regulatory approaches approaches
l Possible government policy objectives for IP-Teleph.
ð Universal Service/Universal Accessð Affordable telecommunications servicesð Tariff re-balancingð Ensuring a level-playing field for competitors and new
entrantsð Promotion of new technologies and servicesð Stimulating investment in network build-out and new
servicesð Impact on revenue streams of incumbent operatorsð Technology transferð Human resource developmentð Economic growth as a whole and in particular in the
communications sector.
21WTPF WTPF -- IP TelephonyIP Telephony
The general pictureThe general picture
At present, several broad national policy emerge
ð First, there are countries that include some or all forms of IP Telephony within their regulatory system ð Second, there are countries that prohibit IPTelephonyð Third, there are countries that do not regulate IP Telephonyð Lastly, there are countries where the situation is uncertain or the issue remains to be formally
addressed.
Status of IP Telephony in ITU Member StatesStatus of IP Telephony in ITU Member States
Cyprus, Ethiopia, Kenya, Peru, PhilippinesCountries that permit voice/fax over IP based networks but prohibit over public Internet
Albania, Azerbaijan, Belize, Botswana, Cambodia, Cameroon, Côte d’Ivoire, Croatia, Cuba, Ecuador, Eritrea, Gabon, Indonesia , India, Israel, Jordan, Latvia, Lithuania, Morocco, Mozambique, MyanmarNicaragua, Nigeria, Pakistan, Paraguay, Qatar, Romania, Senegal, Seychelles, Swaziland ,Thailand, Togo, Trinidad and Tobago, Tunisia, Turkey
Countries that prohibit the use of both the Public Internet andIP-based networks for voice or fax services
Australia, Canada, China, Korea (Rep.), MalaysiaPermitted. If real-time, treated similarly to other voice telecommunications services (licensable, subject to more extensive provisions of voice regulation)
Czech Republic, Hong kong SAR, Japan, Singapore, SwitzerlandPermitted. If real-time, subject to light conditions (notification/registration may be required, other basic provisions of voice regulation
EU Countries5, Hungary (if delay =/>250ms and packet loss >1%),
Iceland
Permitted or not regulated, if not real-time (not considered
voice telephony)
Angola, Antigua and Barbuda,1Argentina, Bhutan, Congo,Costa Rica, Dominican Republic, Estonia2, Gambia, Guatemala, Guyana, Madagascar, Malta, Mexico, Mongolia 2, Nepal, New Zealand, Poland, Slovak Republic, St Lucia1, St Vincent3, Tonga, Uganda, United States4, Viet Nam
No specific prohibition for voice/fax over the Public Internet or over IP-based networks
23WTPF WTPF -- IP TelephonyIP Telephony
Other Policy and Regulatory issuesOther Policy and Regulatory issues
l License restrictionð A few countries expressly license PTOs to
provide IP Telephony -l Regulatory distinctionð Type of service, Voice or Data, Mode of
network transmission, Quality of service l Ffunctional equivalencel Technological Neutralityl Impact of IP Telephony on Universal
Service/Access
Developing country concernsDeveloping country concernsl Developing countries receive no international
settlement payments for IP trafficð Increasingly, incoming IP traffic includes IP
telephony and fax traffic which they must terminate
l They must pay to peer with US/EU backboneð Peering costs are rising as IP traffic continues to
grow exponentiallyl They must pay both half-circuits of the
International Private Line to the foreign ISPð Even though traffic flows in both directions over the
circuit, once it is establishedl Telephone and fax traffic shifting to the Internetð What will replace the US$7 bn from settlements?
Pricing IP for voice servicesPricing IP for voice servicesl In competitive, low-price marketsð Main market opportunity for IP Telephony is for
value-added services, e.g., unified messaging
l In markets in transition to competitionð IP Telephony offers a route towards early
introduction of competition and creates downward pressure on prices
l In high-price, monopoly marketsð Where permitted, IP Telephony creates opportunities
for low-cost callsð Even if not permitted, IP Telephony is widely used to
reduce costs of international call termination
IP Telephony wants to be “free”IP Telephony wants to be “free”
0
1
2
3
4
5
6
18-Oct-99
22-Nov-99
10-Dec-99
12-Jan-99
04-Apr-00
Reg
iste
red
use
rs (
mill
ion
)
0
50
100
150
200
250
300
350
Cal
l min
ute
s (m
illio
n)Users
minutes
Cumulative number of Dialpad users & call minutesSince launch on 18 Oct. 1999
Source: ITU, adapted from DialPad.com press releases.
Opinion AOpinion A(The general implication of IP Telephony)(The general implication of IP Telephony)
WTPF is of view thatð IP Telephony application are best supplied in a market in which
consumers have choiceð Government regulation should aim to foster an effective competitive
environmentð Regulation may be appropriate where there is market failure or when
public interest cannot be adequately met by industryð Member States should examine the implication of applying existing
regulatory regime to IP-based services and application
WTPF invitesð MS & SM to consider the possibility of the introduction and of the
deployment of IP technologies and IP applicationð All MS to review their current regulatory framework with a view to:
– Encourage investment– Achieving public policy goals in the context of a converged communication service
environment– Considering the possibility of opening their communication services market with
respect to IP Telephony by adopting a competition oriented approach
Opinion BOpinion B(Action to assist MS & SM in adopting to the changes in the (Action to assist MS & SM in adopting to the changes in the
telecommunication environment due to the emergence of IP Telephotelecommunication environment due to the emergence of IP Telephony)ny)
WTPF invite the Secretary General and the Director of the Bureauxð To promote understanding of the potential benefits of IP-based
technologies and IP application to assist MS &SM, particularly developing countries
ð (i) by updating previous IP Telephony case studies;ð (ii) by carrying out cost studies;
(iii) by helping to attract investment and promoting the use of international lending, Bureaux
ð In the pursuit of the above, to conduct regional workshops in partnership with Member States and Sector Members(i) how telecommunication infrastructure build-out;(ii) technologies that can support IP Telephony;(iii) how to create an environment that will attract investment;(iv) issues such as cost structures, pricing mechanisms, interconnection, numbering, quality of service and market consideration, etc.
Opinion COpinion C((meeting the human resource development challenges)meeting the human resource development challenges)
WTPF invites the ITU, in particularly ITU-D ð to facilitate the sharing of knowledge and views, by Member States and Sector
Members
Invites ITU-Dð 1 to encourage Member States and Sector Members to create integrated human
resources transition plans;ð 2 to assist Member States and Sector Members in evaluating and identifying new and
changing human resources requirements; ð 3 to draw upon existing BDT research and skilled personnel to identify:ð (i) HRD/HRM and training issues related to network evolution;ð (ii) HRD/HRM and training issues related to new technologies, including IP; ð (iii) skills leading to the creation of a business environment that will attract
infrastructure investment,
Invites ITU-T and ITU-R….Invites Sector Members…Invites SM & MS….invites ….
Opinion DOpinion D(Essential studies by the ITU to facilitate the introduction of (Essential studies by the ITU to facilitate the introduction of IP IP
Telephony)Telephony)
WTPF invites the three ITU Sectors ð each, for matters within its competence, and based on contributions from ITU Member
States and Sector Members, to initiate new studies or pursue current ones, and to present any findings as soon as possible, to facilitate the introduction of “IP telephony” on a global basis, particularly with respect to:
ð 1. in ITU-R,compatibility and inter-operability of radio access between IP networks and PSTNs,
ð 2. in ITU-T,
a) a clear working definition of “IP telephony” and “Internet telephony”;b) whether, and to what extent:
ð i) to require compatibility of “IP telephony” with the existing international telephone service;
ð ii) compatibility should also include, but not be limited to, aspects of performance;c) whether, and to what extent:
ð i) to consider the possibilities of how “IP telephony” can be a part of national PSTNs;
ii) aspects of traffic identification and measurement;d) identifying the cost elements of international IP connectivity
ð 3. In ITU-D, taking account of the need of developing countries to plan a strategy of migration for their
networks into IP-based networks