Cox: VoIP ready for prime time

Cox Communications is shifting more emphasis onto voice over Internet Protocol technology.

The cable provider's broadband phone network still has a place for old-fashioned circuit switches, but a Cox representative confirmed on Tuesday that the company is planning more orders of soft switches and other VoIP network equipment.

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Last July, both Comcast and Cox said they had significant reservations about VoIP technology, which digitizes phone calls and packages them in the Internet Protocol. The high price of the equipment needed to create a VoIP phone service with all the trimmings made it to hard to justify risking the investment. So both cable companies stuck with traditional phone switches, which were more expensive to own and operate but had superior reliability and voice quality.

But "now, the price of VoIP equipment has come down," the Cox representative said, making it a more attractive investment. Cox once thought that it would save about 10 percent in capital expenses when choosing VoIP over circuit switches. But that savings is now about 40 percent, the company said.

The move puts more pressure on cable market competitor Comcast to adopt VoIP technology. A Comcast representative did not have an immediate comment.

VoIP's long history of problems with voice quality also has taken a turn for the better, Cox said. The representative said Cox was impressed by VoIP's performance during recent trials of the network equipment.

"Cox believes that VoIP is now ready for prime time," Cox wrote in a May 12 white paper titled "Voice over Internet Protocol: Ready for Prime Time."

The company representative said Cox has stopped short of issuing a "VoIP only" edict, however. The company is still deciding how to introduce its phone service in Las Vegas, for instance, which might have enough potential customers to justify the more expensive circuit switches.

But by 2005, VoIP will likely be the technology Cox chooses for boosting network capacity in a market already served by circuit switches or for branching out from metropolitan areas into smaller markets.

[rgruenhaus]

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