“VoIP (Voice over Internet Protocol) will eventually change the dynamics of the (telecom) industry,” said J.P. Mark, senior analyst with San Francisco, Calif.-based Investment Bank, First Security Van Kasper. He added that quite simply, the VoIP market will continue to grow, and this should leave traditional telcos a bit worried. “The long distance companies are in grave danger of losing their customer-base,” he said.
In an attempt to remain one step ahead of the technology curve, Richmond, B.C.-based NorthVoice Communications Inc. has begun construction on what it says is the world’s largest single company-owned International VoIP network. NorthVoice will use the network to serve both residential and business customers.
“We want to be a major telco soon, that’s why we’re building this global network,” said Alan Yong, vice-chairman of NorthVoice. “In order to be dominant you have to built the world’s largest network. If you don’t, you cannot be dominant.”
The network will cover 81 cities on three continents in its first phase and an additional 240 cities on five continents in its second phase. According to NorthVoice’s corporate communications manager, Richard Moravec, the company plans to offer its customers international telephone-to-telephone and PC-to-telephone (using IP) long distance with a variety of services and various fixed monthly rates, including conventional low-cost, international long distance services.
“One of the things that’s key in the industry right now is when you bundle your services and you offer your services in many fashions and many aspects,” and with easy affordable calling plans — some with free Internet, said Moravec.
With offices established and alliances forged with various telecom providers in key global locations, NorthVoice plans to roll out the service beginning with Canada, the U.S., Hong Kong, South Korea, Singapore, Australia and Malaysia.
“By forming alliances and partnerships, it’s kind of like if we scratch their back, they’ll scratch our back. The principle behind it is that we can help our customer base grow by forming these partnerships and alliances,” said Moravec. “We can help grow their customer base by introducing their services to some of our customers, and in return they (might) offer some of their services for free.”
Yong added, “Right now we cannot be doing business all over the world; we would like to deal with a local partner who knows the market well, and that will allow us a quicker penetration into the market.”
NorthVoice’s chief technology officer, Eric Chan said that NorthVoice will be using a mixture of technologies, “because we’re not just focused on North America. We use a mixture of technology that is available for that particular country. We have some circuits on ATM, frame relay, IP and some leased lines. We are ultimately carrying IP packets on all these transport technologies, and we’re ultimately working at the IP level, and all translate back to an IP network.”
According to industry analyst Dan McLean with IDC Canada Ltd. in Toronto, the pitfall with all VoIP networks will always be voice quality, while the true benefit comes from cost savings.
“I think what they’re trying to offer is a service that’s significantly lower cost than existing long distance voice services, but again it’s the quality issue that’s going to be the one to watch out for,” said McLean. “Is the voice quality toll quality? Are the connections going to be as reliable as they would be with a TDM connection? That’s going to be the issue.”
Chan, however, feels that voice quality is no longer an issue. He said, “We believe that the whole toll-quality issue is going away. People have been using VoIP for their backbone transmission for some time, it just hasn’t been broadcast to the user. We do expect that there are dropouts in these circuits, there’s a small amount of it and that’s just part and parcel of the VoIP technology itself.”
He concluded that “we (NorthVoice) use standards-based measuring tools to continually monitor these circuits to make sure they stay within a particular range of voice quality measurements.”
Both Mark and McLean agree that whether IP is truly ready for voice or not, customers will try the service if for nothing other than the savings. “There are certain buyers who will settle for less than toll quality if the price is right,” said McLean.
NorthVoice has two soft launch pricing plans available: Plan A costs CDN$29.95/month and includes unlimited calling in North America as well as free Internet; Plan B, a limited service that does not include Internet, is CDN$9.95/month. Other services include chain calling, voicemail, unified messaging and NorthVoice Mailbox. Subscribers can sign up for the NorthVoice service via the company’s Web site,