The Hindu Business Line : Taking to the stage

Voice Over Internet Protocol, which makes it possible for voice and data to be transmitted over the same network, could edge out TDM technology. Call centres, and companies too, are perking up.

TECHNOLOGY has a way of making businesses fall in line. There are times when a new technology knocks at your door so hard that pretending not to hear is not an option.

Voice Over Internet Protocol, or VoIP, as it is better known, is in that league of far-reaching technologies.

And suddenly, businesses and firms in India that rely heavily on voice and data transfer, are sitting up and taking notice. And in some cases, welcoming VoIP with open arms.

So, what makes VoIP so enticing? In a word, convergence — of voice, data and video. VoIP makes it possible for voice and data to be transmitted over the same network, resulting in reduced costs and greater efficiency. Across the country, chief technology officers of companies and technology consultants are thinking hard about when is the right time to switch from more traditional systems such as Time Division Multiplexing (TDM) to aVoIP system.

And the people with the heaviest thinking caps on are the ones associated with call centres, since their core operations depend on how cost-effectively voice and data are transferred.

Most Indian call centres are still using TDM-based architecture, which, some industry insiders say, perhaps a bit uncharitably, is a technology of the past. In TDM, voice and data are transmitted using different end-to end equipment, which increases costs and reduces flexibility.

Some players such as vMoksha and Transworks, both Bangalore-based call centres, are already using VoIP. Other call centres are seriously thinking of following suit.

Says Chetan Jain, Director, BT Infonet India, a Mumbai-based firm that provides managed network communication services, "IP offers control over quality of voice and data, as well as cost reduction. So, you can prioritise your traffic or re-route it."

Another interesting factor that may eventually push BPOs to VoIP is skill set. After some years it may be difficult for firms to find a lot of system engineers with expertise in TDM technology. It's a classic technology dilemma: technology evolves and it makes more sense for systems engineers to educate themselves on the newer technology.

Says Girish Bhandarkar, CTO, BT Infonet India, "The more visionary CTOs know that now is the time to invest in IP."

When you do a TDM vs VoIP comparison, lower capital costs on a per seat basis and a less complicated set-up are some of the plus points of VoIP.

Though telephony rates have come down, VoIP offers much more than just a direct cost reduction due to its technological advantage - of transmitting voice, data and video on the same network.

The advantages are as follows:

Management: Managing a VoIP-based system is much easier. Fewer maintenance engineers are required.

Flexibility: For call centres with operations in two or three countriesthe cost advantage is more since their IP infrastructure saves a lot of extra cost. Estimates of cost-savings vary from 20-30 per cent. Initial investments may be high for a company switching in toto from TDM to VoIP but there are other long-term factors such as ease of upgradability and flexibility.

"By using IP technology, management of equipment at local and remote ends is made easy. No hardwiring of the set-up is needed and most features are software-configurable," says Abnash Singh, Executive Vice-President, vMoksha Technologies, which uses VoIP.

Avaya, Cisco and Nortel are some of the major manufactures of IP-based phones and hardware in India.

The market for IP Telephony in India has grown from $0.1 million in 2000 to $54.4 million in 2004. It is expected to grow at a CAGR (compounded annual growth rate) of 25.6 per cent to reach $268 million in 2011, according to a study by Frost and Sullivan.

"VoIP, while consuming more bandwidth per call than the traditional TDM technologies, lends itself to more resilient multi-site, disaster recovery-based architectures," says Amit Mehta, National Marketing Manager-Call Center Solutions, Avaya Global Connect Ltd.

The VoIP boom is not limited to call centres, however. For big firms having branches in several cities, using VoIP for internal communication is cost-effective. "It makes no sense for a very small firm to invest in VoIP. Bigger firms with at least three or more locations can benefit. For MNCs with offices all over the world, VoIP is absolutely important," says Bhandarkar.

But there is still some resistance to change. And the reasons aren't surprising. For one, most major call centres in India set up their infrastructure at a time when VoIP was still an evolving technology, and switching to VoIP now would mean a huge initial investment. Secondly, there is still a degree of scepticism about the quality and effectiveness of VoIP.

According to Alok Shende, Director, Technology Practice, Frost and Sullivan, these concerns are not unfounded. "Voice is a very sensitive application and the speed is very demanding," he says. However, he agrees that with bandwidth freely available, most of these problems can be sorted out. "VoIP will be attractive if the costs are lower, and the technology is as good or better (than TDM)," says Thiagarajan, Managing Director and CEO, Hinduja TMT, a BPO of the Hinduja group.

And is his company about to take the plunge? "We are actively experimenting with VoIP, but there are no plans to switch over immediately," he says. However, that may change soon. Any new call centres setting up operations in India now will almost certainly use VoIP for their core operations. "A lot of call centres are expected to switch over to IP in the next 3-6 months. And most new call centres will start from IP," says Jain.

And there is a further movement towards outsourcing of the entire technology management to other players, while the BPO concentrates on its core operations. Outsourcing within outsourcing.

"Capital expenditure is higher for small call centres with 50-100 seats. That's where we come into the picture. We tell them we will manage all your operation costs ona monthly payment basis," says Jain of BT Infonet India.

Some call centres have already begun to shift part of their operations onto an IP network. The next few years could see this steady trickle become an avalanche.

sumeetkaul@thehindu.co.in

Picture by K. Ananthan

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
All for visibility

Growing threat

As much as the eye can see...

Computers of the grid, unite!

You're being watched!

Cartoon