Column

Editor, Itedge, Segun Oruame.

VoIP and the end of GSM service

The mobile phone technology overtook the plain old telephone system (POTS) in a manner you could akin to a technology coup not too long ago. Mobile technology enthusiasts, specifically the army of GSM providers and equipment vendors were convinced the overthrow of POTS by GSM phones marked the beginning of a new era that would last as long as the reign of the POTS.
 

They were right on only one score. The emergence of mobile telephony with the dominance of the GSM technology marked the beginning of a new era. But they were painfully too wrong on the assumption that GSM would reign for as long as the decades in which the POTS held sway all over the world.
About two billions GSM phone subscribers now exist in the world and they were signed on in less than half a decade. The growth of GSM has been both phenomenal and shocking for equipment vendors and investors alike. That perhaps explain the ‘absolute belief’ that the new king of the turf would last and last.
Traditional telephony had taking almost forever to grow particularly in under-developed economies where landlines are still terribly few. But for mobile technology, telecommunication would still have remained where it was in several backward countries five years ago. And that is where about 200,000 people would have to struggle to use a phone line.
Many things worked against the POTS. The huge capital required for building public switch telephone networks (PSTNs) was simply scaring for depressed Third World economies, most of which were in debts. The time frame required to rollout the networks was long (and is still long). Expectedly, time frame for return on investment (RoI) was pretty long and is still the case. Besides, with most developed countries operating economies that fostered monopolies with the attendant inefficiency of such corporations it took time for the telephone lines to grow.
In several countries, the lines did not grow. They were shrinking in numbers and efficiency. Nigeria offered a classic case. Out of the 700,000 landlines that were available, less than 450, 000 were connected and fewer of this number ever worked. In 60 years or so, the landlines did not grow. They shrank. The only thing that grew was the degree of inefficiency.
When GSM came and recorded so fast an uptake, it was certain that the influence of landline telephony would shrink and that the mobile would become the new king. It took just months for this to happen in Nigeria and elsewhere. And early this year, the GSM Association was celebrating the lordship of GSM telephony and the end of landline kingship.
The Association’s enthusiasm is not entirely misplaced. It is its optimism that needs re-examined. Just as the mobile was a disruptive technology to the landline, the Internet is already a disruptive technology to the GSM mobile phone and other POTS variants including the landline. What GSM enthusiasts would not want to accept is the certain overthrow of traditional circuit switch by packet switch.
The age of soft switch is here. Voice over Internet telephony (VoIP) is no longer the croaking device you explore with a phone jack into a PC; it is the same mobile handset you carry around and the stationary phone box on your home or office desk. The voice clarity is unimaginably high. And the uptake is becoming as phenomenal as was the GSM phone. It took almost a century for the landline to be dethroned, it is glaring that GSM phone would mature faster than its exponents expected and its reign would end so unceremoniously.
The Internet is killing everything conventional in the world of communication. No longer is there a difference between data and voice or voice and video. Everything is simply a packet of data to be decoded into its original form at the point of termination. No longer is there international or local traffic. Traffic is traffic. No longer is there a tariff benchmark based on number of pulse or trunks through which the data has been transmitted. It is safer to have a flat charging rate for calls as you could also make calls attract zero tariffs.
What this means is that telephone companies would become no bigger than the size of laptops and operators would be no more than a few technology savvies selling providing services via suitcase technologies. GSM networks are described as suitcase technologies because of their relative small sizes and fast speed of deployment compare to the traditional landline. The sobriquet would be appropriately used for the new phone service providers.
Regulators are becoming more reasonably proactive having been taught a lesson, ironically by GSM, that it was foolish to position regulation against technology. The Nigeria’s regulator is talking of Unified licence or Converged licence to express its acceptance of the inevitable. In an age where Wi-Fi is coming to roost and the success of Skype PC-PC-landline phone delivery is pointing to the future of telephony that is not two years away but months-around-the-corner, GSM operators are certainly re-thinking their business models and future. There are Wi-Fi handsets in the market and equipment vendors to push Internet telephony are becoming increasingly visible on the scene. Now, you could use your Wi-Fi phone to dial another Wi-Fi phone separated by thousands of kilometres for zero fees as long as the Internet connection is in existence. No longer is there need for that irritating toll on talk via the POTS or those insidious roaming charges by GSM operators. Everything is simply converging into one local traffic irrespective of the distance. Just as there is no local or international email, there is no local or international call. Traffic is traffic.
Already, operators are deploying IP solutions as a way of re-modeling their service delivery and reducing cost profile even if they are not publicly owning up to this. But the new technology regime would not tolerate a partial shift. It is asking for a complete turnaround in focus and orientation.
The new merchants of telephony would not be owners of mix-breeds: the POTS and the packet switch. They would be drivers of a new dawn in the telecom industry where voice is an added value and making money in telecom would require more than the ability to deploy technology. Operators would be required to be more creative in bundling services to make subscribers pay very little for several products.
In summary, there is no question on whether VoIP would kill POTS. The question is how soon?

Quote
Regulators are becoming more reasonably proactive having been taught a lesson, ironically by GSM, that it was foolish to position regulation against technology.
 

Back To Top