Voice over frame relay: Is free too expensive?

A few months ago, at a "Voice over Packet" seminar, we were discussing the economics of buying voice frame relay access devices (FRAD) - or similar voice-over-IP (VoIP) gateways or voice-over-ATM equipment. We pointed out, with careful calculations, that once users have a frame relay network in place, they can add voice over frame relay (VoFR) across corporate intranetwork connections for about half a cent a minute. This is a straightforward calculation determined from taking the usage-based frame relay tariffs from MCI WorldCom, translating the price per megabyte to a price per megabit per second for a given committed information rate, and then applying this price per megabit per second to a typical VoFR conversation.

At this seminar, a participant made the bold statement that he didn't care how inexpensive VoFR services became, because in his mind, even "free was too expensive." Of course, we immediately began making statements about wanting to sell him land in a swampy marsh in Florida, and offered free stock in our latest you-name-it.com marketing scheme.

But he had an excellent point. Network bandwidth cost is becoming so inexpensive that the cost per megabit per second may soon be of minimal importance. Instead, the cost of managing that bandwidth will be the key factor.

When our friend asserted that "free was too expensive," what he was getting us to think about was that there is indeed a cost associated with provisioning your own telephony services. You have to purchase the equipment and provide your own chargeback systems. You also must provide personnel to support the voice network, and these people need a different skill set than a "data only" support person. Furthermore, the corporate telecom department is putting its reputation on the line to provide service that's as good as the "toll quality" service available from the phone company.

But it still might be worth it. How do you know? Stay tuned.

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Steven Taylor, consultant and broadband packet evangelist, and Joanie Wexler, an independent networking technology editor and writer, team up to bring you this analysis and commentary. Taylor specializes in education and market analysis, and Wexler adds incisive reporting and research. For more detailed information on most of the topics discussed in this newsletter, connect to www.webtorials.com, the first Web site dedicated exclusively to market studies and technology tutorials in the Broadband Packet areas of Frame Relay, ATM, and IP. Feedback and additional topic ideas are welcome. Please contact taylor@webtorials.com or joanie_wexler@mindspring.com>

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