Voice over DSL promises big cost savings

Voice-over-digital subscriber line (DSL) technology has been hailed as a possible money saver for small companies and large firms' branch offices, but actual pricing information has been hard to come by until recently.

At least one competitive local exchange carrier (CLEC) has started offering the service in Las Vegas, and another has announced its own pricing plan as both scramble for their share of a small and midsize office voice market worth an estimated $US45 billion.

Voice-over-DSL technology allows service providers to carve up a regular voice phone line so it can carry up to 16 voice calls with 500K bit/sec left over to carry data.

That makes it possible for Las Vegas-based MCG Communications to bundle 10 voice lines, Internet access and 500 minutes of long distance for $345 to $500 per month. The prices vary because they are set for individual markets, says John Keough, MCG's national manager of DSL sales and development.

Network Telephone, a CLEC in Pensacola, Fla., is planning similar packages that will be available next year for $400 per month, says CEO Ray Russenberger.

That amounts to charging about 40 percent to 60 percent less than traditional carriers would charge for the voice lines on a T-1, says Matthew Davis, an analyst with The Yankee Group in Boston.

Other CLECs, including Focal Communications, Choice One Communications, GST Communications and Rangefire Integrated Networks, are readying voice-over-DSL services that they hope to deliver next year.

While most of them intend to market these services to small and midsize enterprises, the voice-over-DSL bundles are also suited to branch offices of big companies.

GST is crafting one of its voice-over-DSL services for just that purpose. Instead of a data link to the Internet, one package will include a link back to the customer's corporate headquarters, says David Williams, a marketing vice president for GST. Branch offices could get Internet access through the headquarters' Internet link, he says.

DSL providers install a box called an integrated access device (IAD) at the customer site, and the customer plugs its phones and office router into it. The carrier handles the rest.

While buying bundled voice, Internet and data services from a single carrier is attractive, the services could have their drawbacks.

For example, the IAD needs customer-supplied power, and if the power fails, so do the phones and Internet access. "It would be a single point of failure," says Glen Gorham, a customer care senior engineer at Clarify, who has personal data DSL service from Pacific Bell.

Another potential worry lies in the fact that many of the CLECs offering voice-over-DSL services will purchase some elements of those services from other carriers. That means customers could wind up having to deal with multiple carriers in the event of a service problem.

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