VoIP over satellite: over!

05 Sep 2006

Between the hype over triple-play services and VoIP as a challenger to traditional telco voice, it

Between the hype over triple-play services and VoIP as a challenger to traditional telco voice, it was only a matter of time before DTH providers followed in the footsteps of cable operators in adding VoIP to their service bundles either to gain new customers or give current subscribers more value for their money.

Last week, DirecTV of the US was one of the first DTH satellite operators to take the plunge, announcing a six-month VoIP pilot program in Florida via DirecPath, its JV with Hicks Holdings, using gear from Vistula Communications Services. The news made a bit of a splash in the states, even though little about it was actually new. DirecTV already offers triple-play voice/data/video bundles through partnerships with telcos like Verizon, Qwest and BellSouth.

Even the concept of VoIP over satellite has been around for years. Many of the major satellite operators offer VoIP backhaul nowadays. Hughes Network Systems has partnered with Net2Phone to offer VoIP over HNS' Direcway terminals, while Vonage has an agreement with SkyFrames.

Even so, the DirecPath service may be the first of several attempts by satellite operators to leverage VoIP to stick voice into their portfolio. At least one other operator - SES Astra - has announced similar intentions, although company president Ferdinand Kayser has declined to give even a ballpark dates on availability.

It will be interesting to see how this plays out, not least since DirecPath is targeting MDUs - which only account for 20% of the total video market in the US, but have much a larger presence in key Asian markets. That said, most MDUs tend to be increasingly well served by terrestrial connectivity.

Indeed, DTH has a hard enough time competing against cable operators in the pay-TV space and telcos in the broadband Internet space. Their value proposition has almost always been either the very high-end market or the rural sector where connectivity options are limited. Adding VoIP to their service mix doesn't really open any new markets for them.

Sure, that's no reason not to offer it. If nothing else, VoIP may help DTH players earn a little extra revenue and at least keep up with cable guys deploying voice. But residential VoIP over satellite faces a significant obstacle that cable doesn't: convincing users that the technology works fine. Kick around on the tech forum Web sites where the DirecPath news has been posted, and you'll find plenty of skepticism about quality, latency and jokes about having to say 'Over!' after every sentence.

Such concerns may not be entirely unfounded. While VoIP over satellite today is vastly improved over previous generations, how well it works depends on who you ask, whose equipment is installed, or what protocols you're using. Some users report decent quality (at least when compared to mobile, if not fixed-line voice), others report lousy user experiences.

Presumably DirecPath knows these things and has an architecture capable of addressing all relevant technical hitches - or, if they don't, they will by the end of the pilot trials. But by that time, even more terrestrial gaps may have been filled in by VoIP over wireless broadband. If that's the case, DTH operators may find it easier to do what DirecTV was already doing with the telcos - leave the voice segment to their VoIP partner on the ground.

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