Art Yonemoto
Art Yonemoto is President of Yonemoto & Associates. He has been conducting Telecom (Landline and Wireless) audits for 21 years...
Read Full Bio >>

Art Yonemoto | September 09, 2015 |


Demystifying Voice & Data -- Part 6

Demystifying Voice & Data -- Part 6 In the sixth in an ongoing series of posts, I take a closer look at VoIP and packet switching.

In the sixth in an ongoing series of posts, I take a closer look at VoIP and packet switching.


As an IT/telecom professional, you are likely to have a good understanding about the theory and principles of voice and data. However, even if you are an expert, at some point in time, you will need to discuss or explain voice, data and wireless principles to your nontechnical, line-of-business colleagues. The intent of this, and the other posts in this series, is to help you demystify technical concepts for nontechnical colleagues, customers, clients, and so on.

Each article covers a couple of topics, and tries to explain these in nontechnical terms. While the examples and analogies may not always be 100% applicable, they should provide some perspective -- i.e., highlight the differences and advantages.

For my previous posts in my "Demystifying Voice & Data" series, see:

In this article, I will demystify the topic of VoIP.

VoIP & Packet Switching: Forerunners to the Sharing Economy?

Airbnb is a great company to look at as an example of the sharing economy. You have a resource that has excess or underutilized capacity; in the case of Airbnb, you have a home or apartment with spare bedrooms. As the homeowner or renter, you are looking to gain more revenue by renting out this excess capacity. You successfully rent your spare space to another party, who benefits by paying a lower rate than "renting" a dedicated resource like a hotel room.

Now imagine you are an IT/telecom carrier that has a resource such as a dedicated circuit from point A to point B. In the traditional voice world, you rent out the circuit to a single dedicated user for a period of time (i.e. 3-minute call). After that single user, you rent out the dedicated circuit to another user. Upon careful analysis, you realize the voice call only utilizes a fraction of the available space on that dedicated circuit.

As the carrier, you realize that you can make a lot more money by adopting the sharing economy model. Instead of renting out a dedicated circuit to one user, you rent out the circuit to a large number of users, via IP technology. In a hotel room analogy, this would be the equivalent of changing your hotel room into a hostel. Instead of one bed to a room, you replace the single bed with two bunk beds, increasing the utility of the room by four.

Follow the Money

Let's look at IP/packet switching from a carrier's bottom line perspective. You can sell a commodity -- voice calls at a certain amount ($.10/minute) -- using traditional voice technology. However, by using IP and packet switching, you can increase the number of calls over your facilities by a factor of 100 (or more). Thus, you could lower your prices from $.10 to $.05, or even $.01, and still increase your profitability. But how can you increase supply?

We have all heard of fiber optics, where signals are transmitted as light. What happens when you add a prism to white light? It breaks out the light into a spectrum of colors from red, orange, yellow, green, blue, and violet. Each color represents a certain frequency (lanes) of white light. Now by using color "lanes," you have increased capacity from one to six. But you then realize that you can go even finer in colors. Instead of the broad categories of red, orange, yellow, etc., you are able to create distinctive lanes between colors. Thus new lanes of red/orange, orange/yellow, yellow/green , etc., are created. You just increased the amount of bandwidth to 12 times. And you go even further and create even more "lanes" such as red/red/orange, red/orange/orange, and so on.

After separating out more distinctive colors, you end up with 256 color lanes (frequency), each of which can carry its own level of traffic. Thus, by this one technological advancement, dense wave division multiplexing , you have increased supply by over 250, with minimal additional cost.

So while you dropped the price of voice calls 50 to 90% ($.10 to $.05 to $.01 per minute), the cost of carrying dropped by a factor of 100. Your actual cost is a small fraction of a penny (e.g. $.001). From a business perspective, the cost of providing voice calls is no more than a few dollars, even for the heaviest users. Voila, the cost of carrying calls have dropped dramatically, and you can offer free long distance dialing as a feature of your service.

As a consumer, many of us still value unlimited long distance from a historical perspective (i.e. worth $20/month or more). Thus, we think we are getting a great deal with unlimited long distance. From the vendor's perspective, offering unlimited LD costs a dollar or two and helps prop up a higher monthly service charge.


While everyone generally benefited from the migration to VoIP technology, there are still some major issues. In particular, voice call quality has dropped dramatically. In my next No Jitter article, I will look at the causes of poorer voice quality of VoIP.

"SCTC Perspectives" is written by members of the Society of Communications Technology Consultants, an international organization of independent information and communication technology professionals serving clients in all business sectors and government worldwide.


March 7, 2018

Video collaboration is experiencing significant change and innovation-how can your enterprise take advantage? In this webinar, leading industry analyst Ira Weinstein will present detailed analysis

February 21, 2018

Business agility has become the strongest driver for enterprises to begin migrating their communications to the cloud-and its a benefit that enterprises are already realizing. To gain this benefit

February 7, 2018

Enterprises are starting to grasp the critical importance of security and compliance in their team collaboration deployments. And once the risks are mitigated, your enterprise can integrate these n

March 12, 2018
An effective E-911 implementation doesn't just happen; it takes a solid strategy. Tune in for tips from IT expert Irwin Lazar, of Nemertes Research.
March 9, 2018
IT consultant Steve Leaden lays out the whys and how-tos of getting the green light for your convergence strategy.
March 7, 2018
In advance of his speech tech tutorial at EC18, communications analyst Jon Arnold explores what voice means in a post-PBX world.
February 28, 2018
Voice engagement isn't about a simple phone call any longer, but rather a conversational experience that crosses from one channel to the next, as Daniel Hong, a VP and research director with Forrester....
February 16, 2018
What trends and technologies should you be up on for your contact center? Sheila McGee-Smith, Contact Center & Customer Experience track chair for Enterprise Connect 2018, gives us the lowdown.
February 9, 2018
Melanie Turek, VP of connected work research at Frost & Sullivan, walks us through key components -- and sticking points -- of customer-oriented digital transformation projects.
February 2, 2018
UC consultant Marty Parker has crunched lots of numbers evaluating UC options; tune in for what he's learned and tips for your own analysis.
January 26, 2018
Don't miss out on the fun! Organizer Alan Quayle shares details of his pre-Enterprise Connect hackathon, TADHack-mini '18, showcasing programmable communications.
December 20, 2017
Kevin Kieller, partner with enableUC, provides advice on how to move forward with your Skype for Business and Teams deployments.
December 20, 2017
Zeus Kerravala, principal analyst with ZK Research, shares his perspective on artificial intelligence and the future of team collaboration.
December 20, 2017
Delanda Coleman, Microsoft senior marketing manager, explains the Teams vision and shares use case examples.
November 30, 2017
With a ruling on the FCC's proposed order to dismantle the Open Internet Order expected this month, communications technology attorney Martha Buyer walks us through what's at stake.
October 23, 2017
Wondering which Office 365 collaboration tool to use when? Get quick pointers from CBT Nuggets instructor Simona Millham.
September 22, 2017
In this podcast, we explore the future of work with Robert Brown, AVP of the Cognizant Center for the Future of Work, who helps us answer the question, "What do we do when machines do everything?"
September 8, 2017
Greg Collins, a technology analyst and strategist with Exact Ventures, delivers a status report on 5G implementation plans and tells enterprises why they shouldn't wait to move ahead on potential use ....
August 25, 2017
Find out what business considerations are driving the SIP trunking market today, and learn a bit about how satisfied enterprises are with their providers. We talk with John Malone, president of The Ea....
August 16, 2017
World Vision U.S. is finding lots of goodness in RingCentral's cloud communications service, but as Randy Boyd, infrastructure architect at the global humanitarian nonprofit, tells us, he and his team....
August 11, 2017
Alicia Gee, director of unified communications at Sutter Physician Services, oversees the technical team supporting a 1,000-agent contact center running on Genesys PureConnect. She catches us up on th....
August 4, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, has lately been working on integrating enterprise communications into Internet of Things ecosystems. He shares examples and off....
July 27, 2017
Industry watcher Elka Popova, a Frost & Sullivan program director, shares her perspective on this acquisition, discussing Mitel's market positioning, why the move makes sense, and more.
July 14, 2017
Lantre Barr, founder and CEO of Blacc Spot Media, urges any enterprise that's been on the fence about integrating real-time communications into business workflows to jump off and get started. Tune and....
June 28, 2017
Communications expert Tsahi Levent-Levi, author of the popular blog, keeps a running tally and comprehensive overview of communications platform-as-a-service offerings in his "Choosing a W....
June 9, 2017
If you think telecom expense management applies to nothing more than business phone lines, think again. Hyoun Park, founder and principal investigator with technology advisory Amalgam Insights, tells ....
June 2, 2017
Enterprises strategizing on mobility today, including for internal collaboration, don't have the luxury of learning as they go. Tony Rizzo, enterprise mobility specialist with Blue Hill Research, expl....
May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.