The switch from TDM to IP, why is it taking so long?

The telecom industry has undergone drastic changes over the last few decades, from a service only able to deliver voice capabilities, to a service where voice is one of a large number of features delivered across a network. These changes have accumulated to the point where another major change is imminent, a change to an all-IP (Internet Protocol) infrastructure. This change is already happening, but with TDM (Time Division Multiplexing) technology still being used for the majority of phone calls today, it may be further away than first anticipated.

According to a whitepaper put out by IP networking company Sonus (Westford, Mass., U.S.A.) and HeavyReading, 80% of fixed lines worldwide still use TDM as of 2011. In the same whitepaper it states that TDM will be used on 64% of fixed lines in 2015.

There are obvious benefits of using IP over TDM, especially in today’s world. One of the benefits of IP is easy access. Since IP is traveling in data packets over the internet, your phone will work no matter where you plug it in on the Local Area Network (LAN), where TDM can only be used when a specific cable is present.

But even with benefits of IP, there are still challenges in switching to an all IP world. These challenges involve the difficultly of phasing out TDM equipment, as well as the resistance of carriers to make the switch.

According to Aashu Virmani, senior director of marketing at Sonus, carriers are hesitant to replace TDM equipment, especially class 4 and class 5 switches, because of the size and cost associated with the equipment.

“These large switches were built to last. These are some of the most reliable pieces of equipment in telecom,” said Virmani. “If you think of a large carrier like AT&T, they have invested and paid for this equipment, and they are not going to get additional value out of replacing it. If it’s not broken, why fix it?”

Even though these switches are reliable, many carriers have stopped investing in them, mainly due to the high cost associated with maintenance.

“They are capping the investment on the TDM sites, they are not investing anymore money,” said Virmani. “Spare parts are getting more expensive; finding people who can actually do these replacements is getting far more expensive, too.”

Capping investments on TDM equipment should speed up the switch to IP, but there is another reason for the slower-than-expected transition, according to Virmani, and it is largely a business one.

“The next phase of this will come when the carriers understand that once you replace a TDM line with SIP (Session Internet Protocol), even though they are making potentially less money on the SIP line, they can start selling value added services on top of the SIP line, which was never possible on a TDM line, “ said Virmani. “TDM is only good for one thing, which is to carry voice.”

Under TDM, the major offers from telecom providers had to do with voice, for example, three-way calling and call waiting, but switching to IP could add value added services such as instant messaging, video calling between sites and dialing from a website. According to Virmani, once large carriers realize the potential to make “new money” by converting to IP the transition will begin to increase.

“Once the tier 2 and tier 3 carriers start to offer SIP lines into enterprises, that will put pressure on the larger carriers to start offering SIP.”

Until carriers begin to push the use of IP over TDM, the telecom industry will continue to be in this transition phase. According to Sonus, it could take at least another decade before TDM is gone completely.

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