Aswath Weblog

TDM vs. VoIP Comparison

Even though I agree with some of the points made by Fred Goldstein in a recent column, his analysis is weak in some places. Here are highlights.

• VoIP is actually far more complicated than TDM: This may or may not be true. But the point is it needs to be done only at the end-points. Since the end-points will be dealing with only a handful of sessions, even low-end processors can be easily handle these complicated functions. Thus individual costs are low. The intermediate nodes, including Session Border Controllers process only IP datagram headers.
• TDM's lack of packet headers also makes it more bandwidth efficient than VoIP: Bandwidth usage is comparable between the two systems; any difference between them is not of consequence.
• MGCP (media gateway control protocol) and Megaco (H.248) are real innovations: I am of the opinion that MGCP class of protocols is nothing more than Q.931 stimulus protocol used by ISDN BRI. It uses UDP/IP instead of LAPD. Granted this is a big advantage for the service providers, but the credit goes not to these protocols but IP networking philosophy. It should be noted, the users do not realize the benefits.
• TDM switches are expensive because they are built on old platforms (my paraphrase): This may be. But then again, TDM switch vendors could have easily changed the hardware platform and benefited their lifelong customers. Instead they abandoned them and preferred the deadly embraces of newcomers. This is a strategic mistake. They were under the influence of “The Innovators’ Dilemma”. Even now it is not too late. I would imagine that PSTN service providers would like to offer their customers, some of the features made available to VoIP users. This could be done in a very cost effective manner. But we haven’t heard any proposals along this line.

In final analysis, VIP provides benefits to the end-users because they can avoid service providers altogether. VoIP provides advantages to new entrant service providers because the barrier to entry is low. This is a double-edged sword, since the market has become very competitive. The incumbents can respond to this threat by offering new and additional features; but it looks like neither they nor their vendors seems to be taking steps in this direction.