Enough With the PSTN Already

By Dawn Hogh, Veraz Networks

As more and more end users migrate from TDM-based voice services to IP/broadband telephony, the costs of maintaining legacy networks continue to rise while revenues plummet. Accordingly, telcos are turning their focus to providing all-IP-based broadband access over both fixed and mobile networks – because that’s where the growth lies.

Recently AT&T sparked controversy when it responded to the Federal Communications Commission’s (FCC) public notice seeking comment on the transition from a circuit-switched network to an all IP-based network.  AT&T’s suggestion was for the FCC to mandate an orderly transition away from the PSTN, as maintaining a separate TDM voice network increasingly becomes a financial burden. While this may seem extreme, AT&T also correctly notes in its filing that “the question is when, not if, POTS and the PSTN over which it is provided will become obsolete.” While IP networks are currently viewed as one of the options for delivery of voice services, I believe this decade is likely to be the turning point for IP networks and that they will soon become the de facto standard for all telecommunications.

In addition to AT&T’s FCC response, it’s become clear that IP communications and VoIP will be one of the few growth areas for carriers over the next couple of years. As we begin to recover from the economic downturn I am beginning to see a shift in the IP communications industry. Economics play a huge role in determining the pace of migration from legacy TDM to IP networks. As things turn around, there are signs that network transitions will accelerate. This will set the stage for increasing CAPEX investments in IP networks.

Another factor driving this transition is the explosion of mobile data traffic worldwide. With this increase in mobile traffic comes the need for more capacity. TDM networks with their limited bandwidth will be hard-pressed and eventually will be unable to handle the increased traffic load, forcing carriers to look to IP-based networks.

Legacy service providers today must effectively offer two connections into the home: a multimegabit IP pipe and a 64kbps voice connection. However, users are increasingly abandoning TDM-based voice services in favor of wireless. Cable companies are grabbing landline users with full-featured VoIP offerings. Those landline losses increase the cost-per-user of maintaining legacy networks, while reducing the revenues generated from such networks.

Class 5 TDM switching technology is nearly 30 years old, and there soon will be a lack of expertise to maintain these systems. The costs of maintaining a separate TDM network will become so high; they will not be economically viable. By moving voice over to the IP pipe, service providers can retire unprofitable legacy networks and dramatically reduce expenditures spent on network maintenance.

Today’s IP networks are built to handle bandwidth intensive TV and video services – both AT&T and Verizon, for example, offer TV and data over IP. They have every reason to encourage users to move to voice over this robust network, and hasten the migration.

The TDM landline network defied the odds by making it into the 21st Century. But now, as AT&T stated, it’s not “if” but “when” legacy TDM-based networks will become obsolete. Many carrier executives and engineers will miss the familiarity of a TDM landline, but the requirements and economics of delivering triple play mean the time has come for an all IP network.

Dawn M. Hogh has served as vice president of marketing for Veraz Networks since November 2007. Prior to Veraz, she held executive positions at OpVista Inc., Ciena Corp., Kestrel Solutions, Lumenaré Networks and various engineering and marketing leadership roles at Lucent Technologies.