Telco Grade Is Obsolete

Includes: T, VG, VZ
by: Yankee Group

By Chris Nicoll

The telco industry long has prided itself on its ability to deliver near full-time service. When was the last time you picked up a true telco land-line and did not hear a dial tone or had a call dropped in the middle of the call (unless you were calling someone else on a cell phone)? It just never happens. And when a CO went down, it was such news that a report had to be made to the federal government with the cause and duration of the outage and it made the evening news and newspapers. The term ‘five nines’ became synonymous with the highest quality service.

Unfortunately, it just doesn’t matter anymore. For an ever growing number of people, ‘Telco Grade’ just doesn’t mean anything to them as they don’t have a frame of reference to compare it to. Just like they’ve never experienced the music jump of an 8-track tape, there is a growing segment of the population that will not have any experience with a five-nines availability land-line service, and never will. The traditional wired "home phone" will go the way of the dinosaurs: most of them disappeared, but there will be a few strange remnants that survive (like the crocodiles).

As people are "cutting the cord" on their primary phone, and turning to broadband voice services such as Skype and Vonage (NYSE:VG) or voice bundled with their broadband TV service. These users are becoming too familiar with voice service issues that 10 years ago would have been unthinkable: dropped calls, static, poor voice quality or other anomalies. And for the most part, they are adapting instead of complaining. If the service is bad enough, they vote with their feet and change suppliers.

The difference for the operators, as they develop their own voice over data solutions, is that for many users today the service quality expectation no longer requires five nines reliability. It is just too easy to hit the redial button to reconnect whether it’s your mobile, Skype or a soft client. Not that I think this is a good thing. When I call 911 or I’m talking with one of my children who is lost or upset, the last thing I want to do is redial constantly.

The fixed line of the future is also not a telco line for many in the X, Y, and Z generations: it is going to be a VoIP service, over their entertainment broadband connection or a mobile broadband connection. While the expectation is the service works reliably, I doubt it will equal the five nines availability of the traditional voice networks. I know my cable HDTV service is far from five nines today. Maybe its time to vote with my feet and change?

This is where the telcos need to adapt. "Telco Grade’ needs to be redefined for today’s applications and today’s users as delivering the best user experience over a data connection: fewer dropped packets, greater jitter control, higher bandwidth options, better service interworking and greater service portability, secure communications, all in an IP world. And ideally with close to five nines service reliability.

Telco grade five nines, sad to say, will one day be an exhibit in the Smithsonian, next to the Western Electric telephone and the original IBM PC. The redial button is just too easy to push.