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Itu Internet Reports 2001 ITU Internet Reports IP TELEPHONY December 2000 INTERNATIONAL TELECOMMUNICATION UNION ITU, Geneva 2000 International Telecommunication Union (ITU), Geneva All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission of the International Telecommunication Union. Denominations and classifications employed in this publication do not imply any opinion on the part of the International Telecommunication Union concerning the legal or other status of any territory or any endorsement or acceptance of any boundary. Where the designation “country” appears in this publication, it covers countries and territories. ISBN 92-61-08621-7 FOREWORD This new report in the ITU Internet Reports series looks at the topic of IP Telephony. Internet Protocol (IP) Telephony is rapidly reaching the top of the agenda for the telecommunications industry worldwide. The possibility of transmitting voice over IP-based networks, with all its challenges and associated opportunities, such as voice and data integration, constitutes a milestone in the convergence of the communications sector. This is the third in the series of ITU Internet Reports (the series previously known as “Challenges to the Network”). The first two in the series looked at “Telecommunications and the Internet” (in 1997) and “Internet for Development” (in 1999). In July 2000, the ITU Council selected IP Telephony as the topic of the third World Telecommunication Policy Forum, to be held in Geneva, 7-9 March 2001. This report presents some of the research carried out within the ITU in preparation for the Forum. It is intended to serve to inform participants at the meeting, and also to provide a reference document for others interested in this emerging topic. Chapter one of this report, Why IP Telephony, looks at how IP Telephony is defined and the different forms that IP Telephony can take. Chapter two, Technical Aspects of IP Telephony, suggests more specific definitions and looks at the interworking of IP-based networks with circuit-switched networks. Chapter three, Economic aspects of IP Telephony, looks at the reasons for the popularity of IP Telephony, which mainly stem from the fact that it offers certain price and cost advantages compared with other more conventional forms of telephony. Chapter three also considers the likely impact on public telecommunication operators. Chapter four, Regulatory aspects of IP Telephony, discusses the different regulatory approaches to IP Telephony, and the methods used to categorize it within those regulatory structures. Chapter five, IP Telephony in practice, summarises the results of a series of country case studies carried out by the ITU in support of this research programme. Finally, Chapter six, Conclusions, bring these different themes together and concludes that the IP Telephony industry is now approaching maturity. Much of the research for this report, including the case studies, was carried out under the “New Initiatives” programme, launched at the ITU in 1999. A workshop on IP Telephony was held in Geneva on 14-16 June 2000. The ITU is committed to playing a positive role in the development of the Internet and to extending the benefits of new telecommunications technology, such as the Internet, to all the world’s inhabitants. The Minneapolis Plenipotentiary Conference (1998) passed Resolution 101, which calls upon the ITU to “fully embrace the opportunities for telecommunication development that arise from the growth of IP-based services.” The ITU Internet Reports are hopefully a significant contribution to that commitment. i Acknowledgements The report has been prepared by a team led by Tim Kelly, which included Craig McTaggart, Ben A. Petrazzini, Robert Shaw and Mark Woodall. The statistical tables have been compiled by Mark Woodall with assistance from, Maria- Concetta Gasbarro, Vanessa Gray, Michael Minges and Shalini Sankaranarayanan. Mark Woodall also oversaw the production of the report and served as editor. The case studies programme was co-ordinated by Ben A. Petrazzini and included contributions from Arturo Briceño, K.K. Gunawardana, Peter Lovelock, Gustavo Peña-Quinones, Somkiat Tangkitvanich and William Withers. The report’s cover was designed by Jean-Jacques Mendez. The report has benefited from the input and comments of many reviewers, both internal and external, to whom we owe our thanks. In particular, we would like to thank Lucy Firth, Magda Ismail, Arthur Levin, Michael Minges, Ilona Pergel, Chip Sharp, Susan Schorr, Lara Srivastava, Yolanda Azelart, Nick Ingelbreckt and Anthony Wong. We would also like to express our gratitude to those respondents within Public Telecommunication Operators, Internet Service Providers, regulatory bodies and national administrations that were receptive to our requests for specific information and data related to Internet developments in their countries. Without their assistance, a report of this nature would be impossible. In particular, we would like to thank the Ministry of Posts and Telecommunications, Japan, for a generous voluntary contribution, that has enabled the case study programme to be expanded. The data contained in this report are taken from the ITU’s “World Telecommunication Indicators Database”, which is managed by a team comprising, Maria-Concetta Gasbarro, Vanessa Gray and Dalia Mendiluce under the supervision of Michael Minges. The Database is available on diskette, or via the Internet as a subscription service. Internet host data is sourced from Network Wizards (<http://www.nw.com>) and, for Europe, from RIPE (<http://www.ripe.net>). All of the ITU’s indicator reports and databases are available for purchase, on the Internet, at <http://www.itu.int/indicators>. The views expressed in this report are those of the authors and do not necessarily reflect the opinions of the ITU or its membership. ii TABLE OF CONTENTS GLOSSARY. ........................................................................................................................................................ i FOREWORD ...................................................................................................................................................... iv LIST OF ABBREVIATIONS AND ACRONYMS .......................................................................................................x CHAPTER ONE: WHY IP TELEPHONY? .......................................................................................................... 1 1.1 WHY?.....................................................................................................................................................................1 1.2 WHEN?...................................................................................................................................................................2 1.3 WHAT?...................................................................................................................................................................7 CHAPTER TWO: TECHNICAL ASPECTS OF IP TELEPHONY .........................................................................11 2.1 INTRODUCTION.....................................................................................................................................................11 2.2 IP TELEPHONY STANDARDS ACTIVITIES ...............................................................................................................11 2.3 QUALITY OF SERVICE ...........................................................................................................................................15 2.4 BANDWIDTH .........................................................................................................................................................15 2.5 NUMBERING .........................................................................................................................................................17 2.6 IMPACT OF IP TELEPHONY ON NETWORK ARCHITECTURES...................................................................................18 CHAPTER THREE: ECONOMIC ASPECTS OF IP TELEPHONY........................................................................21 3.1 CONSUMERS, CARRIERS AND COUNTRIES .............................................................................................................21 3.2 SIZE, SUBSTITUTABILITY AND SETTLEMENTS .......................................................................................................24 3.3 IMPACT ON THE PUBLIC TELECOMMUNICATION OPERATOR .................................................................................27 CHAPTER FOUR: REGULATORY ASPECTS OF IP TELEPHONY .....................................................................33 4.1 INTRODUCTION.....................................................................................................................................................33 4.2 CHANGING CONCEPTIONS OF TELECOMMUNICATION NETWORKS AND SERVICES..................................................33 4.3 CURRENT APPROACHES TO THE REGULATORY STATUS OF IP TELEPHONY............................................................35 4.4 IP TELEPHONY IN HIGH-PRICE MARKETS ..............................................................................................................39 4.5 SUSTAINABILITY OF LOCAL ACCESS NETWORKS ...................................................................................................39
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