Cisco struggling to have its VOIP heard

Undaunted by the incumbency rivals enjoy with carriers, Cisco Systems Inc. says it too will soon trumpet successes in service provider packet telephony.

Cisco's leadership in enterprise voice-over-IP is well understood, thanks to the company's near monopoly position in enterprise data networks. But Cisco's fortunes in service provider packet telephony have been less evident even though the company says it's been pleased to date with its results.

"We certainly feel reasonably positive, particularly as we run some of the largest VoIP networks in the world, most notable the ones in the People's Republic of China," says Phil Sherburne, general manager of Cisco's packet telephony call control division. "In service provider packet telephony overall, we certainly view ourselves as very much participating and as having been quite successful in a large number of service provider packet telephony deployments."

Sherburne says Cisco will announce some packet telephony wins this fall, focusing predominantly on voice over broadband access lines, such as Ethernet and cable. Indeed, voice over broadband access is Cisco's sweetspot in service provider packet telephony, as opposed to other areas, such as Internet offload, tandem switch replacement and Class 5 circuit switch augmentation and/or replacement.

But analysts are awaiting further clarity in Cisco's service provider packet telephony strategy.

"Cisco has a great packet telephony story for enterprise-based solutions, but it's been unclear what its direction is with respect to voice-over-IP in service provider markets," says Teresa Mastrangelo, a senior analyst with RHK Inc. "There's no clear Class 4/Class 5 story. In the cable space, it has a good opportunity to gain some market share with voice applications based on its strong (cable modem termination system) presence, but even that is unclear as to which product would be part of that voice solution."

Sherburne says Cisco's BTS 10200 softswitch and PGW 2200 PSTN gateway are two products that can be used for call control in a cable or packet network. But for now, all evidence suggests carriers are handing their packet telephony business to their incumbent circuit switching vendors.

Nortel just announced a packet-based Class 4 tandem switch trunking replacement pact with Verizon comprising Nortel's Passport ATM switches. Nortel Networks Corp. claims to have been awarded more than US$2 billion in voice-over-packet contracts to date.

Lucent Technologies Inc. recently announced an IP Centrex win with SBC Communications Inc.

In both cases, Verizon Communications Inc. and SBC went with their incumbent suppliers wrapping the potential of packet switching around existing time-division multiplexing (TDM) gear, Sherburne says.

"Those are longtime vendors for those customers are they clearly have relationships," he says. "When they're talking about doing TDM stuff then that is not a place we would go and actively try and compete."

Meanwhile, four Cisco service provider customers -- China Unicom Ltd., iBasis, ITXC Corp. and Genuity Inc. -- have each carried at least one billion H.323-based VoIP minutes, Cisco claims. China Unicom, Cisco's largest VoIP carrier, has transported more than three billion VoIP minutes to date, the company says.

"The largest packet telephony networks are Cisco-based," Sherburne claims.

Cisco also has a CLEC customer in the Atlanta area deploying its BTS 10200 softswitch. Cbeyond is offering local telephony services and PRI offload to small and midsized business in the Atlanta area.

Other Cisco call control customers include British Telecommunications PLC, Tiscali SpA, Tele Danmark AS, One.Tel Ltd./Scarlet and Singapore Telecommunications Ltd., which was announced this week.

More are on the way, Sherburne promises.

"We have both in the U.S. and outside the U.S., in Asia in particular, have a number of trials underway and would expect in the fall timeframe to be making further announcements," he says. "I don't think we're at all disappointed with where we've been but we believe we're well positioned in trying to take what our customers tell us is important to them and reflecting that back into our focus around broadband access."

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