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					                                    Internet telephony going mobile?
                                             Anders Rotkirch, 50348V
                                 Research Seminar on Telecommunications Business II
                                              T-109.551, Spring 2005

Abstract                                                      interesting ways of how VoIP can be used in the short
                                                              term from a mobile terminal, but not necessarily a
As Internet telephony is becoming more and more               mobile VoIP terminal.
popular in fixed networks, the interest of Internet
telephony in mobile networks arises.                          Depending on the wireless access technology, whether
                                                              it is a TCP/IP connection or not and depending on the
There are many ways how we can use Internet                   connection speed, there are different ways or scenarios
telephony or VoIP (Voice over IP). This essay will            of using VoIP.
begin with some concepts associated with information
technology goods. Then a short overlook at the                This paper studies how VoIP can be used in mobile
protocols associated with VoIP and with wireless              networks, both existing and new. Some networks
communication is presented. By looking at how mobile          provide greater mobility and some greater speed. Some
VoIP can be used, three use case scenarios are                offer direct TCP/IP access, some do not. Making the
introduced. At the end of this paper the advantages and       integration seamless is therefore an important point.
disadvantages of each scenario will be presented.

This paper emphasizes on how we use mobile Internet           2. Success Factors in the New Economy
telephony today and how we will use it in the future,
not on the in-depth technology or on specific business        In the book Information Rules, Carl Shapiro and Hal R.
cases.                                                        Varian write about durable economic principles that
                                                              hold in the New Economy. As always there is a market
                                                              uncertainty involved when new services become
Key Words                                                     available. Even though new technologies constantly
                                                              arrive the principles remain.
Mobile VoIP, VoWLAN, VoWiMAX
                                                              Creating a solution that binds the customer to that
                                                              solution is called lock-in effect. The lock-in effect is the
1. Introduction                                               result of the costs that a user has to pay for switching to
                                                              a competitor. Knowing how to take advantage of this
Although VoIP is a relatively old technology it has           effect is a huge competitive advantage. The lock-in
become somewhat of a hype today. Already in 1995              effect is usually easier for the first movers since they
there was a free VoIP software client called PGPfone.         enter the market first. (Shapiro and Varian 1999, p.11)
(Internet Calls (VoIP) 2005).
                                                              The positive feedback that arises from a service is when
Flat-rate broadband Internet access and solving some          the addition to the network benefits the whole network.
technical problems with firewalls are the two most            The classical example is the fax machine. If no one has
important factors for the VoIP gaining in popularity.         a fax machine, having one is pointless. On the other
(Company 2; Company3)                                         hand as more fax machines there are the more useful
                                                              they become. Compatibility issues are important here. It
The thought of free calls is an excellent selling             is of course harder to start a new market than to evolve
argument which also explains the current hype. The best       from a previous one. The dominant model is the set of
known VoIP client today is probably Skype. Skype has          product and or service that has become the market
today over 35 million active users and is gaining             leader. Being compatible with the current dominant
150,000 new users each day. (Skype 2005)                      model is always an advantage. (Shapiro and Varian
                                                              1999, p.13)
Of course the calls are not totally free, but in the best
case the end user only has to pay for the Internet access     The basic pricing strategy is usually either
to cover the network costs. The convergence of                differentiation or cost leadership. Differentiation means
different types of media towards an all IP future has         adding value to the product or service to be
clearly begun.                                                distinguished from the competition. Cost leadership is
                                                              making the product or service cheaper than the
In mobile networks this convergence is taking a longer        competitors by the means of economies of scale and
time. Even though in the end all voice communication          scope. (Shapiro and Varian 1999, p.25)
might be VoIP, mobile or not, there are many
3. What is Mobile Internet Telephony?                        company that has successfully integrated Mobile IP and
                                                             IPSec. (Secgo 2005)

3.1 What is VoIP?                                            Motorola, Avays and Proxim's solution for WLAN and
                                                             cellular convergence is called Seamless Convergence.
Wikipedia, the online dictionary defines Internet            BridgePort Networks, IBM, Verisign and Cisco
telephony as the "technology that enables routing of         announced their solution MobileIGNITE in January
voice conversations over the Internet". Voice over IP or     2005. (Finneran 2005)
VoIP, is the name of the protocols that are used for
Internet telephony. The most common VoIP protocols
are RTP, SIP, H.323, H.248, MGCP, IAX, G.711,                4. Different Ways of Using Mobile VoIP
G.729 and iLBC. (Wikipedia 2005)
                                                             The telecoms consultancy firm Analysys proposes five
RTP or Real-time Transport Protocol is a IETF                different types of VoIP in a report for the European
application layer protocol used to deliver audio and         Commission (Analysys 2004):
video packets over the Internet. (RFC 3550)
                                                              Self-provided consumer: Usually free, PC-2-PC
For signaling the Session Initiation Protocol (SIP) is         (e.g. Microsoft Messenger and Skype)
becoming more and more popular and is gradually               Independent of Internet access: Usually not free, but
replacing ITU's H.323 umbrella of protocols.                   cheaper than a normal phone subscription (e.g.
                                                               Vonage and
The most common speech codecs are G.711 and G.729             Provided by broadband access service provider:
which are both specified by ITU-T. G.711 is used for           Additional service or included in a broadband
DTMF and fax tones while G.729 is used for                     subscription    (e.g. Sonera Puhekaista          and
compressing voice. iLBC is a license free codec which
is gaining popularity fast because it handles lost packets    Corporate internal use on business LAN/WAN: All-
well. (Internet Calls (VoIP) 2005)                             IP enterprise networks.
                                                              Carrier internal use: All-IP operator (e.g. Song's
There are also popular proprietary protocols. Cisco for        99577)
example, has Skinny Client Control Protocol but the
best known today is probably Skype's peer to peer VoIP       This categorization does not include a separate view on
protocol and Global IP Sound's audio codec which             mobility. The Finnish Ministry of Transport and
Skype uses.                                                  Telecommunications has noticed this in their report and
                                                             has therefore proposed another categorization into three
                                                             different types. (Internet Calls (VoIP) 2005)
3.2 What is Mobile VoIP?
                                                              Service at a fix location: Available only at a specific
If the definition of mobile Internet telephony is              location (e.g. Sonera Puhekaista)
analogue with the definition of Internet telephony then       Nomadic voice service: Possibility to access the
mobile VoIP could be defined as the protocols that are         service when there is a fast enough Internet access
used for mobile Internet telephony. This means that the        (e.g. Skype and
end terminal needs to be mobile (to some extent) but
                                                              Mobile service: Wireless TCP/IP networks (e.g. 3G
not necessarily a true VoIP client.
                                                               and WLAN)
Mobile VoIP is thus VoIP used from a mobile terminal.
                                                             As noted in both categorizations above, VoIP can be
The wireless connection can be for example Bluetooth,
                                                             used in a wide variety of ways. Even though the
                                                             connection might not be TCP/IP from end to end, VoIP
UMTS. Notice that not all these wireless connection
                                                             can still be used effectively on the way. In the following
methods support TCP/IP. In these cases there has to be
                                                             figure (Figure 1) three different ways of using and
a VoIP gateway somewhere else in the network.
                                                             accessing VoIP services from a mobile terminal are
                                                             drawn. These ways or scenarios, and examples of them,
TCP/IP was designed with a fix network in mind, not
                                                             will be explained in more detail next.
for mobile nodes. Mobile IP is one way of addressing
this problem (RFC 2002). Roaming between different
kind of wireless networks and making the integration
seamless is still a challenge. This is an important issue
since it makes new technologies compatible with older

Security issues are even more important in wireless
networks since eavesdropping is by default easier than
in fixed networks. IPSec is a generic Internet security
protocol. In addition to IPSec PKI needs to be used for
a system with public keys. Secgo is an example of
            Figure 1: Accessing VoIP wirelessly                           4.2 Scenario 2: Home or Small Office is the
                                                                          VoIP Gateway
                                                                          One step closer to the end user is having a VoIP
                 Wireless non-TCP/IP access                               gateway at home or in the office. This gateway can be
                                                                          for example a personal PC or a router connected to a
                                   Fixed TCP/IP
                                                               Internet   broadband Internet access. In this scenario the wireless
  Wireless non-TCP/IP access          access                              connection is non-TCP/IP as well but the gateway is
                                                                          physically closer to the user.

                               Wireless TCP/IP access                     Freenet in Germany proposes such a solution which is
                                                                          also compatible with traditional GSM. At home the user
                                                                          installs Freenet's HomeStation which is a router,
                                                                          broadband modem, VoIP client and Bluetooth access
                                                                          point, all in one. Then Freenet's iPhone is capable of
4.1 Scenario 1: Operator/Enterprise is the                                calling VoIP calls via Bluetooth when it is reach of the
VoIP gateway                                                              HomeStation. (Freenet 2005)

The most usual way today of using VoIP through a                          Another similar example is the Gigaset M34 USB
mobile terminal is by accessing a traditional wireless                    DECT adapter which Siemens has launched. This
non-TCP/IP network such as GSM. The VoIP gateway                          adapter enables DECT cordless phones to access the
in this case is located at the operator. This means that                  PC's Skype client. (Siemens AG 2005)
the user pays only for the first mile and possibly for the
last mile as well. Additional services that are often                     In the first example a router is the VoIP gateway and in
associated with VoIP can also be available. For instance                  the second example it is a PC. In both cases the wireless
presence and profile data can be synchronized with the                    connection is free.
VoIP server over GPRS.

Many large enterprises have their own networks. That is                   4.3 Scenario 3: Wireless End Terminal is
why big firms can be compared to operators and why                        the VoIP Gateway
the two are equivalent in this scenario.
                                                                          Having a wireless end terminal which has a VoIP client
There are many examples of services that uses this                        is maybe the most interesting case. It is an all IP
model. Telia in Finland, today TDC Song, has had for                      solution. The wireless connection can be any TCP/IP
many years a VoIP service for international calls. By                     connection, e.g. GPRS, EDGE, UMTS, WLAN,
dialing the prefix 99577 the call is routed via VoIP                      WiMAX or MBWA. Using VoIP over these
internationally. Only the last mile in most cases is                      connections is called VoIP over GPRS, VoIP over
converted back to a normal telephone call. (TDC Song                      EDGE, etc. or Voice over GPRS, voice over EDGE, etc.
2005)                                                                     In both cases the abbreviation is VoGPRS, VoEDGE,
Company1 has a solution where a client on the mobile
terminal always routes the call to the lowest cost. This                  GPRS is too slow for full duplex real time VoIP, but
client is an application which is transparent to the user                 Push to talk (PTT) is a VoIP service which works over
since it runs in the background. In GSM it updates its                    GPRS. It is a good example of a VoIP client in a normal
routing tables through GPRS from Company1's                               mobile phone.
Enterprise Communication Server. This means that
when the call is cheaper to route through VoIP from the                   Today WLAN is probably the most available broadband
home network then it is done. (Company1 2005)                             wireless TCP/IP network. There are a few WLAN VoIP
                                                                          phones on the market already from fabricants such as
Telenordic recently launched a call back service in                       Vocera, Spectralink, Telesym and net2phone. These
Norway. The idea is that the user dials a predefined toll                 terminals are still not very user friendly. Since WLAN
free number and then hangs up. The service will then                      requires more energy than GSM networks for example,
call back the caller who will then enter the actual                       the standby times in these phones are much lower. Also
number to call. The procedure is made easier in                           few of them are compatible with 2G cellular networks.
smartphones by installing a software that integrates with
the telephone's contact lists. (Telenordic 2005).                         One upcoming wireless technology that makes the news
                                                                          regularly is WiMAX. The promises are many: large
Even DECT phones can have a direct connection to a                        operating area, thousands of users per access point,
company's VoIP enabled PBX. Then the wireless                             handover & roaming capabilities, 268mbps speeds both
connection is DECT and the operator is the company.                       ways,... (O'Shea, Dan 2004)

                                                                          3G networks, such as UMTS, are also suitable for VoIP.
                                                                          These networks support TCP/IP natively and have
connection speeds that are fast enough for full duplex      Since users expect VoIP to be free, or at least
real time VoIP. There is however a lack of VoIP             substantially cheaper, the market is going to be very
software clients for 3G smartphones. The pricing in         competitive. The need for differentiation is growing.
most countries makes it also hard to motivate the use of    This can mainly be done through added value services
VoIP over UMTS.                                             to the VoIP service. These services can be ENUM
                                                            compability, presence and profile synchronization,
                                                            roaming, seamless integration with other networks, etc.
5. How do these Scenarios Compare?
                                                            In the table below is an overview of the differences
The dominant design today for wireless communication        between the three scenarios.
is clearly the mobile cellular phone. With a 3-band
GSM phone it is possible to roam almost everywhere in              Table 1: Advantages and Disadvantages
the world. The phones themselves are advanced with
long standby times and advanced functionalities.             Feature            Scenario 1:     Scenario 2:   Scenario 3:
                                                                                Operator is     Home     is   End
All three scenarios described in the previous chapter are                       the VoIP        the VoIP      Terminal is
both compatible and complementary and in many cases                             Gateway         Gateway       the VoIP
the products as well. Being compatible with the                                                               Gateway
dominant design is a key issue. This concerns the            Roaming?           Excellent       No            Good
second and the third scenarios. That is why it is                               possibilities                 possibilities
important that the new products support the old network      Moving             Yes             No            GPRS,
as well (e.g. as Freenet's iPhone).                          terminal?                                        EDGE &
                                                                                                              3G:     yes.
                                                                                                              WLAN: no.
The positive feedback network effect of VoIP is                                                               WiMAX:
evident. Since VoIP to VoIP calls are generally free (at                                                      in        the
least within the same VoIP provider) the value of                                                             future.
adding a user benefits the whole network.                    New          end   No              Yes           Yes
Interoperability between VoIP networks is not as good        terminal?
as it could be. Even though most are based on the same       Flat-rate          No              Yes           Yes
standards they are not always interconnected. Some           possible?
providers are not even interested in interconnecting with    Add-on             Yes             Yes           Yes
other providers. For example Skype uses its own              services?
proprietary, closed standard. In mobile networks             (presence,
interoperability becomes even more important since the
network environment changes more frequently. In the
second scenario the mobility is already very limited        For scenario 3 to really lift off there seems to be a
because it is set to the proximity of the VoIP gateway at   parallel to VoIP in fixed networks. There seems to be a
home or the office. The third scenario on the other hand,   demand for a flat-priced data rate. WiMAX looks very
would benefit greatly of a wide intercompatibility.         promising since it addresses many of the problems with
                                                            WLAN. In-Stat forecasts more than 4,4 million
Having a proprietary solution, like Skype does, creates a   WiMAX subscribers by 2009 (Voice over WiMAX
lock-in effect. The switching costs can be higher to        2005)
move to another network if it is not compatible with the
old one.                                                    3G is also a good candidate for scenario 3 since it seems
                                                            that 3G in many countries is in need of a so called killer
By rapidly acquiring a critical customer base the           application to get subscribers. If 3G operators would
advantages of being a first mover are achieved. As          charge a flat-rate for the data mobile VoIP would have a
noticed before, VoIP is a relatively old technology.        bright future in 3G networks.
Even so, companies like Vonage and Skype have
become important players quite rapidly. Old                 Having a practically free telephone system makes
telecommunications companies might fall behind.             telephone spam or SPIT (Spam over Internet
                                                            Telephony) a concern. In scenario 1 there is always a
In all three scenarios described in chapter 4 no player     small fee involved which eliminates SPIT.
has succeeded as an early mover gaining a lock-in effect
in mobile networks as Skype has done in fixed               The substitutes to mobile VoIP must not be forgotten.
networks. On the other hand, Skype was already an           Normal cordless and mobile telephones are both
example in scenario 2.                                      excellent and cheap in providing voice service.
                                                            Especially in comparison with scenario 3 one should
The main reasons of switching to VoIP – fixed or            remember the existing solution. In Finland mobile calls
mobile – is cost savings. This means cost savings in        are already free for big companies internally and for
phone calls, cost savings in hardware and cost savings      consumers the lowest price per minute is currently at
in network management. (Internet Calls (VoIP) 2005)         0,069€. (Company 4)
6. Conclusion                                                m/cm/pub/showdoc.p?docid=1971&menuid=97&chann
To answer the this paper's title's question, the answer is
not only that Internet telephony is going mobile, but        RFC 2002. IETF.
that it has already begun. All three scenarios already
exist and will continue to expand. True wireless VoIP        RFC 3550. IETF.
terminals that can seamlessly roam in different
networks are still in the future.                            Secgo. 2005. Mobile IP products webpage.
Flat-rate pricing and broadband wireless networks seem
to be the enablers for true end to end mobile VoIP.          Shapiro, Carl and Varian, Hal. R. 1999. Information
Meanwhile there are many ways of how the advantages          Rules : a Strategic Guide to the Network Economy.
of VoIP can be used wirelessly with today's                  Harvard Business School Press. Boston, Massachusetts.
technologies. At last, the 2G networks remain a very
competitive substitute, even though that may change in       Siemens AG. 2005. Gigaset M34 USB product
the future.                                                  webpage.
                                                             Skype. 2005. Press release 15.04.2005
Analysys. 2004. IP Voice and Associated Convergent 
Services. Final Report for the European Commission,          pevoicemail100million.html
January 2004.
                                                             Voice over WiMAX: The Key to Wireless Broadband
Company1. 2005. Interview with Company 1.                    Profitability? 2005. In-Stat Report February 2005.
Company2. 2005. Interview with Company 2.
                                                             Wikipedia (2005).
Company3. 2005. Interview with Company 3.

Company4. 2005. Interview with Company 4.

Finneran, Michael. 2005. The Payoff From
WLAN/Cellular Integration. Business Communications
Review March 2005 Vol. 35, Iss. 3; pg. 22

Freenet. 2005. Freenet iPhone information webpage:

Internet Calls (VoIP). 2005. Ministry of Transport and
Telecommunications Finland Report 16/2005.

O'Shea, Dan. 2004. A Standard Argument: Why
WiMAX Will Rule. Telephony's Complete Guide To
WiMAX 31.05.2004

TDC Song. 2005. TDC Song information webpage:

Telenordic. 2005. GlobalLife home page

Restraints of Communications Services. 2005. Ministry
of Transport and Telecommunications Finland Report

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