Listed below are some of the factors contributing to the cost-effectiveness and/or excitement surrounding Internet telephony as opposed to traditional carrier circuit-switched approaches:
· Carrier charges for overseas calls are far higher than underlying costs.
· The new ‘operators’ – whether they be individual computer-to-computer users, or a nascent carrier such as OzEmail – have nothing to lose and everything to gain by undercutting carriers’ overseas call rates.
· Customers want to save money and to support alternatives to their monopoly carrier.
· Excitement about a new technology.
Splitting a continuous signal such as speech into individual packets and launching each packet on its own around the world in the hope that it will arrive is not the most obvious nor necessarily the most efficient way to conduct a reliable international conversation!
It may be argued that Internet telephony is more efficient than traditional telephony because no packets are sent in the 60% or so of time in which the user is not speaking. The counter-argument is that carriers have long used this ‘silence removal’ on their international circuit-switched links to increase the number of calls they could fit into, for instance, a 2Mb/s international link. Similarly, arguments about the improved speech compression capabilities of Internet-connected computers are equally applicable to carriers, whose voice compression hardware and software can easily be upgraded.
It could be argued that Internet telephony traffic, by sharing the links used by other types of Internet traffic, requires, on average, very little extra capacity to be added. But Internet packets are no more efficient than a well-managed circuit carrying many calls of compressed voice with silence removal.
If there was no cost differential between international links for circuit-switched traffic and those links which are devoted to Internet traffic (and which often share the same fibre), then the only fundamental cost advantage in Internet telephony which was equally reliable, and equally available (in terms of supporting high numbers of simultaneous calls whenever customers choose to make them), would be if the peak times for such calls were at different times to the peaks for other types of Internet traffic.
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