Taiwan companies set for VoIP explosion

July 28th, 2006 - Posted in VoIP, Wireless

While the question of who invented the electric telephone is still hotly disputed–Antonio Meucci, Johann Philipp Reis and Alexander Graham Bell are all credited with the invention–what is beyond doubt is that it long ago changed life for people almost everywhere. Furthermore, through repeated innovations, the descendents of those early telephones continue to enhance life today.

Internet technology’s sweep across the world in the late 20th century had a huge impact on traditional telephony systems, most directly through Voice over Internet Protocol. Also known as IP Telephony, VoIP has the potential to revolutionize the world’s phone systems. The first VoIP program was invented in 1995 by the Israeli company VocalTec Communications Inc.

Whereas traditional telephone networks transmit analog signals through the Public Switched Telephone Network, VoIP calls use the Internet telephony gateway to switch analog signals to digital signals, compress digital signals and transmit them in packets. VoIP technology uses the Internet’s packet-switching ability to provide phone services. These compressed packets need only 6.3 kilobits per second and are able to share lines with other information-switching forms. Traditional phone calls require 64 Kbps and are unable to share lines with others. This largely explains why VoIP calls are much cheaper. IP has no mechanism to ensure the data packets are delivered in sequential order, however, and cannot therefore provide a Quality of Service guarantee. VoIP also encounters problems of latency–the time required for packets to travel from one PacketShaper to another–and jitter–the variation in the delay of received packets in a flow.

Moreover, since household VoIP hardware uses equipment such as broadband modems powered by household electricity supplies, they are unable to function during power outages, unlike traditional telephones linked to telephone company phone lines, which can continue to function by means of back-up generators or batteries installed at telephone exchanges. As it is not possible to geographically locate IP network users, emergency calls made through VoIP systems are not easily routed to a nearby call center.

While telephone calls made through the PSTN are governed by technical standards from the Geneva-based International Telecommunication Union, there are currently three different types of VoIP service in common use.

The first, and still the easiest to use, are the computer-to-computer calls. Several companies offer free or very low-cost software for this type of VoIP, for which a caller simply needs a microphone, speakers, a sound card and an Internet connection. Users are generally charged a monthly Internet service provider fee for computer-to-computer calls regardless of the distance.

The second type of VoIP service uses an analog telephone adaptor, which converts the analog signal from a traditional phone into digital data for transmission over the Internet.

The third type is the IP Phone, which, having a handset, cradle and buttons, looks almost identical to normal phones. Directly connecting to a user’s router, IP Phones are equipped with all necessary hardware and software.

A fourth type, the next generation of VoIP using wireless fidelity IP Phones, are already available. These allow users to make VoIP calls from any Wi-Fi hot spot.

As long as Internet connection is available, users of the same VoIP service can travel around the world making and receiving phone calls for a single low fee. VoIP phones can also integrate with other Internet services, such as video and audio conferencing, and message or data file exchange.

Both ISP and PSTN providers have identified VoIP’s potential as the future mainstream, with traditional telephony operators constructing complementary VoIP networks so as to provide multilateral services for their clients. In Japan, for example, where Yahoo-Broadband Japan’s launch of its VoIP service in 2003 attracted over 5 million subscribers within one year, the traditional telephony operator Nippon Telegraph and Telephone Corp. suffered a 20-percent drop in revenue over the same period. In a move aimed at maintaining its customer base, NTT also started to offer a VoIP service.

According to surveys of American enterprises conducted by the In-Stat/ MDR, only 3 percent of corporations used VoIP in 2003, a figure that rose to 12 percent by the end of 2004. As for the development of VoIP in Taiwan, until VoIP numbers are available to consumers, users are limited to software applications.

This has not prevented Taiwan’s companies taking the leading role in manufacturing VoIP-related products, however. According to the Computer and Communications Research Labs under the Industrial Technology Research Institute, the output value of this sector rose to US$461.5 million last year, up from US$369.2 million in 2004 and US$261.5 million in 2003.

This rise is mirrored by Taiwan’s overall communications industry, which is expected to be worth US$21.2 billion this year, a 39.5-percent rise from last year’s US$15.2 billion. This is reflected in the Global Competitiveness Report 2005-2006 released by the Geneva-based World Economic Forum, which ranks Taiwanese telecommunications sector at No. 6 globally in terms of competitiveness, and ranks Taiwan second and third in terms of prioritizing information communication technology development and national ICT policy.

While such numbers are encouraging to Taiwan’s manufacturers, the proof of the pudding will come with the issuance of VoIP numbers by the National Communications Commission after verification of voice surveillance of VoIP calls. Once VoIP numbers with the 070 prefix are approved, those in possession of a number and an IP phone will enjoy low-cost calls from any corner of the world, and domestic sales of VoIP-related products should also take off.

Source: publish.gio.gov.tw

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