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Monday, April 16, 2007

Why IP Telephony Sucks

12:46:00 PM Posted by Oscar Berg 1 comment
I live with my family in a modern apartment. In fact, it is so modern that we have two high-speed internet connections from two different suppliers and no POTS ("Plain Old Telephone Service"). Both suppliers offer triple play - broadband, television and telephony through their high-speed Internet connections. You get a rebate if you use all three services. It sounds great, doesn't it?

As you probably know, IP telephony uses the TCP/IP protocol to transmit digitized voice data. I would like to call this kind of telephony service NUTS (New Underdeveloped Telephone Service). This is what we got with NUTS that we did not get with POTS:

1. More cables. One from the cable outlet to the modem, one from the power outlet to the modem, and one from the modem to the phone. Since we have a DECT phone, we also have a power cable for that. If we need more phones plugged in somewhere else in our apartment, we simply multiply the number of cables with the number of locations.

2. Another device. Yes, we got yet another device that requires a software to work. Who believes that software comes without bugs? And with the modem, we have yet another device produced in China with cheap plastics that can suddenly break without any apparent reason. I would be happy with just a phone plugged directly into the wall.

3. If we have an emergency (we have kids so it happens) and need to call 112, then 112 cannot automatically locate our address because that does not work with IP telephony. Bad luck.

4. Inflexibility. The modem is plugged into the wall at one location. If we want to have another phone somewhere else, we need to buy another modem. Or invest in a DECT phone (which we luckily already had).

5. Bad sound quality. Ever tried speaking through a bucket?

6. Unpredictable availability. The modem can suddenly stop working, probably because it lost its connection to a server somewhere or due to a crash in the modem software. And if the power goes down at home, then the phone does so too (that's probably a situation when you would need it).

7. Supplier lock-in. The deal for us is like this - one cable, one supplier. Lucky for us, we have two cables and can choose between two suppliers. But then again, if we would have POTS then we could choose between hundreds of operators, most of them competing with price since the services are more or less equal. The two suppliers that we can choose from don't really compete. They simply know that it is a 50% chance that we choose them, so instead of competing with price and other offers they can just split the market between them. This is what we usually call an oligolopy.

8. No extras. We didn't even get a phone bundled in the offer, as you often do with mobile telephony. The killer offer here is that we get to borrow a modem for free. Wow! Obviously, we should be happy if your old phones work with the modem. Additionally, the suppliers offer no extra services compared to POTS. In fact, with POTS we would have more services to choose between than now.

The only benefit of NUTS that I can see is the relatively lower fixed price compared to POTS. But that too is an illusion. Since we mostly call our friends and others on their mobiles, it is the fee for calling mobiles that matters to us. With POTS, we could choose an operator that takes a considerably lower fee for calling mobiles.

With NUTS, we have moved one step forward and three steps backwards. But I am not really upset, because I knew this when we chose supplier. But I regret that we didn't go for just mobile telephony. I regret that we are still stuck in old ways of thinking, still believing that we need something to plug into the wall at home. The future is mobile. And my advice to you all - don't go NUTS!


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