A report for dti john Horrocks Horrocks Technology Limited with David Lewin Peter Hall Ovum Limited

Figure 9: Future scenarios

Conclusions

1. 
   Public telephony will be provided increasingly over ATM and IP technology including the public Internet.
   
2. 
   New Internet named telephony is already starting to grow as a means of communicating between informal groups. The presence feature where users are informed which members of their “buddy list” are on-line are likely to be very popular and lead to a new form of intermittent group communication. This service will eventually become an any-any service and exist in parallel with public telephony.
   
3. 
   The early stages of the changes will be driven mainly by users who make calls from PCs initially for cost savings but increasingly for ease of use. Developments in the Windows operating system and new handsets with USB interfaces will be particularly significant.
   
4. 
   Network operators will introduce packet based network technology. This will happed first for the support of new broadband services including but not dominated by voice. These services will roll out from 2002 and address the main demand for new features.
   
5. 
   The replacement of existing PSTN services will happen much more slowly and not be complete even by the end of the decade because the existing circuit switches can continue to be operated at marginal cost. However there will be little new investment in circuit switches and so extra capacity will be provided by a packet based overlay, most probably based on ATM.
   
6. 
   The choice of protocols for networks is not entirely clear. The long term preference seems to be SIP but much further development is needed to support interworking adequately and to provide the special features required by regulation.
   
7. 
   Interconnection will depend on circuit switching until about 2005 when the standardisation has matured sufficiently for IP based interconnection of voice services.
   
8. 
   Transmission delay will be a difficult and sensitive issue, and will have a major influence on network design. It may result in use of ATM continuing for a long time.
   

1 Introduction

• 
  An introduction to and explanation of the technology changes including both IP and ATM
  
• 
  An examination of the market for fixed voice services, the main trends and forecasts of the future volumes of VoIP traffic
  

Voice over IP (VoIP) involves the Internet industry in the provision of services provided hitherto exclusively by the telecommunications industry. This convergence of industries with different histories into the same market sector creates a choice for this report. Should the report be written from the perspective of the telecommunications or Internet industries? We have chosen to write it from the telecommunications perspective because we judge that the audience for whom it is intended will be more familiar with that culture.