2007:003 MASTER'S THESIS Adoption of VoIP Tariq Latif Kranthi Kumar Malkajgiri Luleå University of Technology Master Thesis, Continuation Courses Computer and Systems Science Department of Business Administration and Social Sciences Division of Information Systems Sciences 2007:003 - ISSN: 1653-0187 - ISRN: LTU-PB-EX--07/003--SE Dedication I wish to dedicate this master thesis to my dad Satyanarayana, my mom Shyamala and my younger brothers Kiran Kumar and Arun Kumar for all their sacrifices and incredible support. Kranthi Kumar I dedicate this master thesis to my parents for their invaluable support, which made me to complete my Master degree abroad. Tariq Latif Acknowledgement This thesis work is the final part of masters of Science program in Computer and Systems Sciences in division of Systems Sciences at Luleå technical university. There are many people to whom we would like to thank and acknowledgement for their lively support and help in finishing this thesis. Firstly, we would like to thank our supervisor Svante Edzen for his continuous supervision, without which the work would have been difficult to finish with fulfillment and satisfaction. It would be very difficult for us without your support and assistance while writing the thesis. We would like to thank the people who helped us during the interviews and data collection. We would extend our gratefulness to them for providing their valuable time to express their professional thoughts. The thesis would not have been possible without the contribution of Deepak Agarwal, Alok Kaushal of DTel, Mattias Lindberg of Digisip, Bendik Simonsen of Telio, Jan C Berger of Vyke Communications, S Lachapelle of Marratech and Riikka Poutiainen of Icecom. On a delicate level, we would like to thank all our teachers in the systems sciences division and all our friends in Sweden for their help during the thesis. Finally, we would like to thank our family and friends for their invaluable contribution and ever lasting encouragement in making our studies success. Luleå, January 2007 Kranthi Kumar Malkajgiri Tariq Latif Abstract VoIP is a revolutionary technology, which has become a key topic in both the growing Internet industry and established telecommunications industry. In VoIP technology telephone calls are to be made over computer networks like the Internet where packet switching technique is used instead of circuit switching and analog signals are converted into the digital signals in the real time two-way transmission of conversation. VoIP has become a potential alternative to the existing PSTN technology due to its reduced costs. Despite of its reduced cost, it has major challenges, which are affecting its adoption. This study investigates the major causes for the slower adoption of VoIP and also proposes the suggestions for improving those causes. When writing this thesis, the experiences of these adoption issues of this new technology are limited and therefore this study examines all the possible causes affecting the adoption of VoIP. The study is based on a theoretical phase, empirical study phase, and analysis phase and we further derived conclusions. Table of Contents 1 Introduction ...................................................................................................................... 1 1.2 Problem Discussion .................................................................................................. 4 1.3 Purpose and Research Questions .............................................................................. 7 1.4 Delimitations ............................................................................................................. 7 1.5 Disposition of Thesis ................................................................................................ 7 2 Literature Review ............................................................................................................. 9 2.1 Internet Connections and its types ............................................................................ 9 2.1.1 Dial-up connections ........................................................................................... 9 2.1.2 ADSL connections ............................................................................................. 9 2.1.3 Cable connections ............................................................................................ 10 2.1.4 Satellite (HST) ................................................................................................. 10 2.2 Different forms of VoIP .......................................................................................... 11 2.3 Devices used in VoIP technology ........................................................................... 13 2.4 How VoIP works? ................................................................................................... 14 2.5 Reasons for slower adoption ................................................................................... 18 3 Methodology .................................................................................................................. 23 3.1 Research Purpose .................................................................................................... 23 3.2 Research Approach ................................................................................................. 24 3.3 Research Strategy .................................................................................................... 26 3.4 Data Collection ....................................................................................................... 27 3.5 Data Analysis .......................................................................................................... 28 3.6 Validity and Reliability ........................................................................................... 29 4 Empirical Study ............................................................................................................. 32 4.1 Individual end users ................................................................................................ 32 4.2 Companies multi case studies ................................................................................. 36 4.2.1 Case 1: DTel .................................................................................................... 36 4.2.2 Case 2: Telio .................................................................................................... 38 4.2.3 Case 3: Vyke Communications ........................................................................ 39 4.2.4 Case 4: Digisip AB .......................................................................................... 41 4.2.5 Case 5: Marratech AB ...................................................................................... 42 4.2.6 Case 6: Icecom ................................................................................................. 44 5 Data Analysis ................................................................................................................. 46 5.1 Cross-case Analysis ................................................................................................ 46 5.2 Coding and Explanation .......................................................................................... 49 6 Findings and Conclusions .............................................................................................. 55 6.1 Future Work ............................................................................................................ 58 References ......................................................................................................................... 59 Appendix ........................................................................................................................... 62 List of Tables Table 1: A qualitative comparison of voice over PSTN and over IP Table 2: Different types of research goals Table 3: Two sources of evidence and their comparative strengths and weaknesses Table 4 : Explanation of coding Table 5: Explanation of identified factors and its ranking List of Figures Figure 1: Disposition of thesis Figure 2: How VoIP works Figure 3: Protocol architecture of Internet telephony Figure 4: Schematic Presentation of the Methodology chapter Figure 5: Illustration of relationship between reliability and validity Introduction 1 Introduction In this chapter reader will be introduced with background of the Voice over Internet Protocol technology. Problem discussion, purpose of the research and research questions will also be discussed. Finally disposition of thesis will also be presented. 1.1 Background The global evolution of the Internet and the wide spread growth of networks have been made the Internet part of our everyday life. This is the reason why the interest and demand on different applications has been increased. The raise in demand has produced many new applications. Voice over Internet Protocol (VoIP) technology has become a potential alternative to and supplement of the traditional telephony systems over the Public Switched Telephone Network (PSTN), providing a versatile, flexible and cost- effective solution to speech communications. Internet telephony is a revolutionary technology that has the potential to completely rework the world's phone systems. Internet telephony is the transmission of voice signals from one party to other party digitally i.e., usage of packet switched data network (PSDN). The first documented internet telephony