National broadband provider iiNet has responded to comments by Telstra that consumer-grade Voice over Internet Protocol (VoIP) telephony isn’t yet reliable enough for use by pointing out that it has 170,000 customers using the technology – and they’re very happy, thank you very much.

On Monday, Telstra said it did not believe VoIP could deliver sufficient reliability and quality to enable the telco to launch a VoIP service to consumers, despite revealing plans to launch a VoIP service to small businesses, including those with staff working from home. In addition, Telstra executives claimed the company’s SME VoIP service was qualitatively different from that of iiNet’s offering, as it featured Quality of Service functionality at the telephone exchange level.

However, in a statement, iiNet pointed out it currently had “more than 170,000” customers using its digital voice solution, Netphone, which it had been selling since 2005. “Netphone has proven extremely popular with customers because of both the cost and the quality of service that we can provide over an iiNet-operated and maintained network,” a spokesperson for the company said.

Telstra remains one of Australia’s only major broadband providers without its own consumer-grade VoIP service, with iiNet, Internode and TPG all having long sold VoIP as an add-on option to broadband and even Optus launching VoIP services over its HFC cable network, for example.

“iiNet believes in providing consumers with choice, not dictating how they should connect with friends and family,” the iiNet spokesperson added. “And our customers are making that choice: of those with both fixed and digital voice connections, the majority of calls are made using Netphone.”

iiNet also took aim at the comment by Telstra executive Deena Shiff that Telstra was the only telco to offer full quality of service on its VoIP platform.

“Because iiNet controls and operates the digital voice network, all our customers can benefit from a superior phone service to that experienced by public VOIP products like Skype,” the iiNet spokesperson said. “iiNet also offers full end-to-end quality of service to our business customers using the same Broadsoft platform that the incumbent is now promising.”

iiNet’s comments come as Internode managing director Simon Hackett has also fiercely attacked Telstra’s statements on VoIP over the past week.

In an opinion piece published yesterday, the executive described Telstra’s comments has having “technical inaccuracies and factual errors of significant sorts” all through them. “The key point to understand is that when Telstra say that VoIP isn’t yet reliable, they are making a statement about the quality of the Telstra network only, not about VoIP in general,” he wrote.

“Hence it seems that the correct re-interpretation of “we don’t think the quality and reliability is there. We could bring it to the market tomorrow, but we don’t want to” is really “our network isn’t up to scratch as yet, unlike our competitors”.”

Image credit: Dr Stephen Dann, Creative Commons

Related posts:

1. Consumer VoIP not reliable, says Telstra
2. Why Telstra is wrong on VoIP (by Simon Hackett)
3. TPG may buy iiNet, Telstra tells staff
4. Internode to migrate customers to iiNet DSLAMs
5. Fix your separation plan, ACCC tells Telstra

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1. Fictillius
   Posted 05/05/2011 at 11:22 am | Permalink | Reply

   Telstra owns the copper and intends to keep the value in it and squeeze money from it for as long as they possibly can. It just means they’ll be playing catchup in the future

   Remember they are in deals with NBN Co. to finalise the closure of its copper network. If they offered VoIP now to consumers that would devalue the copper network.

2. Brendan
   Posted 05/05/2011 at 1:13 pm | Permalink | Reply

   Unless it’s Telstra branded, it’s inferior. Doesn’t *actually* matter what the thing is, just that it’s un-Telstra. Which apparently is akin to being un-Australian, or something.

   Telstra do actually have a Voice over Internet Protocol solution, only it’s not called VoIP, it’s called “Telstra Hosted IP Telephony”. Note that we don’t call it “voice over IP” because we shan’t mention the war!

   You can even use SIP, which.. wait, what?

   And we can’t have fixed line services erroded by everyone using it, which is why the above is a business solution. :)

   • alain
     Posted 05/05/2011 at 1:26 pm | Permalink | Reply

     Well don’t buy the Telstra product then, it’s not compulsory.

     • Francis Young
       Posted 05/05/2011 at 2:40 pm | Permalink | Reply

       alain, it’s all very well to say that no-one is forced to buy Telstra VoIP-by-any-name, when over a third of Australians only have Telstra PSTN copper and no ADSL.

       Roll on, NBN, where customer service, reliability, price and support will determine who gets the customers. Internode and iiNet are looking good, as usual.

       • Sydney
         Posted 05/05/2011 at 5:55 pm | Permalink | Reply

         problem with that francis, on the nbn telstra can compete with out being threaten to the accc by internode and iinet, for telstra being cheaper.

         why competitors like internode are wary of the nbn, because they will be competing on level field with no accc help them

       • alain
         Posted 07/05/2011 at 8:53 am | Permalink | Reply

         @Francis Young

         I meant that you don’t have to buy PSTN off Telstra, buy it off iiNet, they sell it alongside VoIP.

3. Ambrose
   Posted 05/05/2011 at 2:30 pm | Permalink | Reply

   HaHa

   Telstra doesnt want consumers to have cheaper VoIP calls
   That’s why they arent selling it

   • alain
     Posted 07/05/2011 at 8:51 am | Permalink | Reply

     iiNet sells PSTN phone packages as well, guess not all the good eggs come in the VoIP basket eh?

4. Mark Chatel
   Posted 05/05/2011 at 2:59 pm | Permalink | Reply

   Suffer in your jocks Telstra!

   • alain
     Posted 07/05/2011 at 10:37 am | Permalink | Reply

     Telstra profit -$1.2 billion
     iiNet Profit – $34.55 million

     Might big jocks to be suffering in.

     • alain
       Posted 07/05/2011 at 10:38 am | Permalink | Reply

       oops ‘Mighty big’……

       • RS
         Posted 07/05/2011 at 11:00 am | Permalink | Reply

         alain, why is it you get upset when anyone doesn’t laud Telstra and always jump to Telstra’s defence?

5. Jason
   Posted 05/05/2011 at 3:01 pm | Permalink | Reply

   I can tell you now when I get NBN I will be getting VoIP.
   Reason why I cant get VoIP now is that I am FORCED to pay for a home phone due to only Telstra hardware being at my exchange.

   Only reason why Telstra does not want customers to use VoIP is that it takes away money from its PSTN monopoly of high fees and crap call rates.

   I have used VoIP in a business environment in the past and found it to surpass PSTN in both sound quality and overall cost.

   • Brad
     Posted 05/05/2011 at 3:21 pm | Permalink | Reply

     “I can tell you now when I get NBN I will be getting VoIP”

     You certainly will because the copper network will be disconnected if I read things correctly.
     I imagine Telstra will “surprise surprise” offer residential VOIP when the NBN is wel underway.

     • Thrawn
       Posted 05/05/2011 at 4:18 pm | Permalink | Reply

       Telstra already has a residential VoIP solution in its FTTH SmartCommunity areas.

       Why should they bother implementing a consumer VoIP solution to their current copper customers when there isn’t any obvious feature or underlying cost benefits (note: cost to Telstra).

       For iiNet, TPG, Optus, Internode there’s obvious benefits to providing an alternative solution to Telstra’s WLR as it’ll save them on costs.

       - Optus has no VoIP solution on consumer DSL at all.
       - For iiNet I suspect they haven’t been providing end-to-end QoS for consumer VoIP. Note the iiNet quote on this article is for ‘business customers’. Telstra says they don’t.. And Renai’s own experience suggests they don’t do end-to-end QoS.
       - Not sure about TPG’s VoIP solution, but I suspect they don’t do consumer end-to-end QoS either.
       - Internode is the only one that definitely do end-to-end QOS solution, and they have the smallest consumer base of them all.

       At least the above non-Telstra ISPs have a good reason to deploy consumer end-to-end VoIP since they don’t have any existing equivalent PSTN service. And yet despite that, mostly they haven’t done it.

       • myne
         Posted 05/05/2011 at 5:16 pm | Permalink | Reply

         Optus have a VoIP product over the same DSL network that the residential customers use.
         It’s had a problematic life over the last 4 years, mainly because of the quality of the copper and the CPE used.
         I hear it’s being re-launched again soon with a lot of the bugs ironed out. Needless to say, the copper will remain an issue until there is no more copper.

         Here’s the old site which no longer works:
         http://smb.optus.com.au/web/ocaportal.portal?_nfpb=true&_pageLabel=Template_woRHS&FP=/smallbusiness/telephony/phonesystems/optusipphone&site=smallbusiness

         They also have higher end versions for larger businesses.
         It uses the same QoS model that others use – different PVC’s for voice and data, and the same core network as the rest of their PSTN services. The quality is indistinguishable from PSTN – except when it’s broken. ETPOS and faxes work on it too the vast majority of the time.
         So, really, it’s only Telstra who have not dabbled in VoIP until now.

         • Thrawn
           Posted 05/05/2011 at 6:22 pm | Permalink | Reply

           Again, thats a business targetted product (with likely non-consumer friendly pricing). VoIP makes more sense there as it can genuinely provide additional features that more closely replicate a PABX (multiple lines, etc).

           What Telstra is saying is that consumer priced VoIP is not up PSTN quality. And thats mostly true (with exception of Internode). Telstra’s been playing in the medium/large business VoIP space for quite a while with their TIPT product. And just now they’re entering the small business market.

           There’s no point to Telstra playing in the consumer VoIP space. If they really want to compete against VoIP providers, all they need to do is cut PSTN prices (which they are doing to an extent). Telstra doesn’t see itself as a direct competitor to the non-QoS VoIP market and in addition, doesn’t want to introduce a product in that market either for image reasons.

           • Peter H
             Posted 05/05/2011 at 9:02 pm | Permalink | Reply

             “What Telstra is saying is that consumer priced VoIP is not up PSTN quality. And thats mostly true (with exception of Internode).”

             Rubbish. Most of the ISP’s provide good quality VoIP. The problems occur when:

             1. the customer doesn’t have a proper QoS device. I’m all for an all in one modem/router/VoIP which automatically handles the QoS – such as the Netcomm NB9WMAXX – say what you like about it not being “Billion” or “Belkin” but it works, and has been rock solid for myself and many of my customers. I can’t say the same for Linksys and D-Link which I ditched years ago.
             2. the broadband connection is not stable – I have it successfully working across the country (city and rural) on anything from 1500/256 and up. One customer uses a 512/128 service, however it can sometimes be flaky (cos of the 128k up-stream)
             3. the host/provider server is overseas – this adds additional delay and quality issues. Whilst I use (and sell) Exetel, and also sell (and have previously used) Engin, I can’t say a bad word about any of the local VoIP providers. I have no experience with Pennytel and do not know where their servers are. I wouldn’t touch overseas ones unless the majority of your calls are to/from where their servers are located, again cos of the latency/quality issues, not any “anti-foreign” phobia

             • Thrawn
               Posted 05/05/2011 at 9:49 pm | Permalink | Reply

               You need to understand the difference between a circuit-switched PSTN and a non-QoS packet switched VoiP network.

               Without end-to-end QoS, your voice packets may end up getting dropped or delayed in any portion of the network. While enabling QoS in your consumer router helps prioritize outbound packets on the 1st hop, it doesn’t stop your voice packets being delayed when your suburb decides to max out the backhaul coming out of your ISP’s exchange. Sure it may work pretty good 99% of the time.. but its still highly dependent on activity outside your control.

               With full QoS, you mark the packets such that every router between you and the VoIP server ensures your
               VoIP packets get through before the torrent packets

               Pennytel (which I also use) takes it another level with severe congestion on their inbound/outbound routes as well. But I’m prepared to put up with it to save 99% costs on a particular country my family frequently dials. For work and important calls though, I still use PSTN which is OK given the very low volume of calls.

   • Sydney
     Posted 05/05/2011 at 5:58 pm | Permalink | Reply

     no the main reason is that the competitors will make sure telstra isnt able to be competitive under the current rules, where they can complain to the accc if telstra becomes as a competitor on the nbn

     Iinet and internode are wary of that fact, that telstra will be a competitor without help from the accc on the nbn

6. sb
   Posted 05/05/2011 at 3:17 pm | Permalink | Reply

   Im one of iinet’s voip customers, and it suits me perfectly.
   We cant tell the difference and neither can the person on the other end.
   Its reliable, its practical, and its cheaper than Telstra.

   VOIP is the way to go.
   If you live in a major city and are not using voip, please learn about it and get voip.
   Swap from Telstra to an isp that offers voip (take your pick) and watch your internet and phone call bills plummet.

   Having Telstra as a home phone and interenet provider nowadays is just crazy, if you are in a major city.
   You are just not getting value for money.
   When you swap to voip you can generally have your current phone number swapped to voip, so you will still have the same phone number.

   • Sydney
     Posted 05/05/2011 at 6:00 pm | Permalink | Reply

     sb

     on the nbn telstra will be allowed to be a competitor without hindrance from the accc

     why isps like internode and iinet are complaining about the nbn

     • PeterA
       Posted 06/05/2011 at 3:52 pm | Permalink | Reply

       Actually they are complaining about the NBN because big carriers are going to be more competetive than small carriers. (where small is smaller than themselves, not their size). They are very happy with the general concept of the NBN (fair competition). The fact the ACCC isn’t required is what they LIKE about the NBN.

       As an aside, Telstra aren’t regulated in the mobile phone market, and they aren’t competetive there. (They just have a better network, and charge more accordingly).

       Also, this is the 3rd time I’ve seen this same comment from you, and I don’t think it has been particuarly relevant to the post you are replying to in any one of them.

7. Tim
   Posted 05/05/2011 at 3:51 pm | Permalink | Reply

   Voip with iinet works relatively well, but it still isn’t as reliable as a pstn line.

   The combo of my netcomm hardware with the voip products means I routinely have to reset the modem to get it working again.

   Fine for me, not if it is a critical service.

8. Daniel
   Posted 05/05/2011 at 4:12 pm | Permalink | Reply

   @Tim – Is that netcomm hardware iiNet provided or did you bring your own hardware when signing up with them? Might just be good clarification for those curious as you can’t blame iiNet for average reliability if you don’t have hardware which is certified and supported by them

   • Tim
     Posted 06/05/2011 at 9:39 am | Permalink | Reply

     Hey Daniel, I have a Netcomm NB9W – so you’re right, it isn’t 100% fair to blame the voip service.

     But given we are talking about large scale plans to migrate pstn customers to voip, it will be impractical to suggest that we must only use the hardware provided by the ISP.

     My point is that for the moment, even with iinet’s own equipment (e.g. BOB) the voip service isn’t as solid as a pstn line. Give it a few years and there will be a greater consistency of standards in the voip area so that we don’t have today’s issues.

     But for now – do I need to change – no. But I know there’s still some way to go before we totally ditch pstn.

9. shaun
   Posted 05/05/2011 at 4:33 pm | Permalink | Reply

   I agree with Tim. IINet voip is good, however it is nowhere near as reliable as a pstn service. I have iinet’s BoB modem and I have to routinely reboot, I cannot dial 1902 numbers and have call drops. Telstra cannot offer voip if iinets is anything to go by.

10. Bleeding Ears
    Posted 05/05/2011 at 4:43 pm | Permalink | Reply

    And I have a Billion modem on Westnet’s VOIP plans and have never had calls drop out. Nor have I ever needed to reset the modem at all.

11. davidl
    Posted 05/05/2011 at 5:00 pm | Permalink | Reply

    there is good and bad points for voip. Call quality can be affected you do get what you pay for now days voip for business customer not the best if you only hear every second word specially when ordering something or getting info residential voip is good its cheap you do not spend 8 hrs on the phone. if it doesnt work use the mobile

12. John Smith
    Posted 05/05/2011 at 6:24 pm | Permalink | Reply

    Another big headed self big note from Michael Malone?

    no way!

    /sarcasm

    • PeterA
      Posted 06/05/2011 at 3:54 pm | Permalink | Reply

      It’s not big noting himself when he is just clarifying that Telstra were lying in their comments about the quality of service provided by its competitors.

13. Alexander Clarke
    Posted 05/05/2011 at 6:36 pm | Permalink | Reply

    I’ve used MyNetFone’s service over an Internode ADSL connection for several years. The lack of QoS really showed, and call quality was often sub-par. However, changing to NodePhone (still over Internode ADSL), I’ve experienced phone call quality that is superior to any POTS service I’ve ever used. The exact experience has been mirrored by some of my colleagues.

    Even with G.722, calls between NodePhone services sound vastly superior to POTS calls.

14. Alexander Clarke
    Posted 05/05/2011 at 6:36 pm | Permalink | Reply

    I’ve used MyNetFone’s service over an Internode ADSL connection for several years. The lack of QoS really showed, and call quality was often sub-par. However, changing to NodePhone (still over Internode ADSL), I’ve experienced phone call quality that is superior to any POTS service I’ve ever used. This experience has been mirrored by my colleagues who have made the same switch (from POTS to MyNetFone to Internode).

    Even with G.722, calls between NodePhone services sound vastly superior to POTS calls.

    • alain
      Posted 05/05/2011 at 6:45 pm | Permalink | Reply

      Yes but the trade-off is it causes doubling up of posts.

      :)

      • Thrawn
        Posted 05/05/2011 at 6:47 pm | Permalink | Reply

        I think they need to enable ‘echo suppression’

    • Greg
      Posted 09/05/2011 at 2:12 pm | Permalink | Reply

      Ive been using MynetFone for 7 years, and have never had problems with network performance.

      I have run mailservers, webserver and downloaded a variety of content, and its yet to affect a phone call.

      People I call never know any different, but the telemarketers do – since the system directs the calls elsewhere to my household handset. ;)

      Anyone who tells me they have network related performance problems needs to step back and reassess. Im proof positive you can have a multi-fauceted network with no (holy grail) end to end QoS and still get reliable results.

15. Lester
    Posted 05/05/2011 at 7:36 pm | Permalink | Reply

    80% of the population probably don’t even know what VoIP even is.

    Tel$tra will be playing on that ignorance by introducing the same thing, but calling it something else. Then in the eyes of the ignorant, because it is Tel$tra, it must be good, so we need it. That way, they don’t introduce them to the same thing that is already offered by other ISP’s.

    On the other hand, when they implement their VoIP they know it needs to be faultless, as the focus will be on them and they will be hammered :), by the relevant authorities.

16. Evan
    Posted 05/05/2011 at 8:48 pm | Permalink | Reply

    I am an iiNet voip user. I use it because it’s cheap. The quality is bad.

17. Stephen
    Posted 05/05/2011 at 9:54 pm | Permalink | Reply

    VOIP, I have been using it for years, SPA 3000 now Billion VOIP Modem , I enjoy getting my monthly bill from Telstra, $23.95 line rental and silent line. Still to bloody much cant get naked line.

    I pay 9.9 cents a call Australia wide with worlddialpoint.net…

    and loving it…..

    The sheep with IINET and the others are paying WAY to much for their VOIP calls, it’s almost like Telstra has re invented themselves and are called IINET, INTERNODE, TPG the prices are atrocious.

18. Roman
    Posted 05/05/2011 at 9:56 pm | Permalink | Reply

    Helstra, you’ve had it to good for to long!!!!!
    Time for a change, all Australia needs now is to work on it’s Cellular Network

19. ozimarco
    Posted 06/05/2011 at 12:06 am | Permalink | Reply

    VoIP is a four-letter word for Telstra so they will call it ‘Digital Voice’ and charge at least twice as much for it. Mum and Dad will never suspect it is VoIP and swear it’s much better. After all, if it comes from Telstra, it must be better.

    • Thrawn
      Posted 06/05/2011 at 12:37 am | Permalink | Reply

      Not the first telco to use ‘Digital Voice’. Thats what Verizon calls it…

    • alain
      Posted 06/05/2011 at 1:58 am | Permalink | Reply

      @ozimarco

      “VoIP is a four-letter word for Telstra so they will call it ‘Digital Voice’ and charge at least twice as much for it. Mum and Dad will never suspect it is VoIP and swear it’s much better.”

      Telstra don’t sell residential VoIP or residential ‘Digital Voice’, there is no ‘twice as much’ charging that Mum and Dad have to worry about.

      The recent Telstra Digital Voice release was for Business only, and included Cisco gear and other Telstra Business products on a monthly business plan.

20. Brian D
    Posted 06/05/2011 at 12:30 am | Permalink | Reply

    If my mother hears what Telsta thinks it will undo a few years of (my) hard work. Which is exactly what they want to happen.

21. Scrutiny
    Posted 06/05/2011 at 3:50 am | Permalink | Reply

    When PSTN was the only choice it needed to be reliable and still is. However with mobiles in almost every home there are alternatives to the reliable choice. And now since moblies are more convenient and reliable, the cost of a fix line PSTN service is over priced for the service. Now that internet services are in most house holds and mobile Cap plans are so cheap, the need for an expensive fixed line PSTN service is less required. $20-$30 a month fixed line rental with no included calls, this is a lot of calls on a cheap VoIP service, and VoIP doesn’t charge you a additional fee for extra services like Caller ID, etc. Many ISP’s are bundling to make the fix line service charge less of a hit.

    Consumers want choice, and for the right price are willing to relinquish quality, however it may not even be percievable to most people (eg; sound quality) if the network quality is sustainable.

    Look at history, it’s not quality that wins, it’s price, timing and get that right you get market share.
    eg; BETA vs VHS, …

    The quality of VoIP is reliant a lot of factors, fixed line PSTN solution doesn’t generally require end user configuration. ISP’s are becoming more savvy with VoIP and are providing devices pre-configured/enabled for immediate use with their network.

    I’d argue most poor VoIP experiences have been from BYO equipment customers without the experience of VoIP or users of non-ISP provided VoIP services.

    ISP VoIP quality is better than other non-ISP provided VoIP services because the ISP can control the QoS over their links. The overall quality of VoIP perceived by the end user will depend on their equipment (firmware version & internet configuration), VoIP configuration (SIP server & codec) and speed of their connection.

    I work for a Govt Department that uses VoIP is across the state provided by a non-Telstra service by another major Telco, using both on-net and off-net gateways providing unlimited national/mobile calls for a fixed handset fee of less than $30/mth.

    My experience with my VoIP service (5 years) and the many I have either told word of mouth or helped setup, is outstanding. I have a Naked ADSL2+ with VoIP, chose a quality all-in-one router with QoS (TOS), and get all national calls free. Enjoy multiple outbound VoIP calls for no extra charge and can have additional in-bound numbers for only $5 extra per month. (ps: and faxing works too!)

    A relative even has VoIP over a Satellite Internet service in remote WA, this works consistently, albiet a slight delay, but they also have a prepaid Telstra NextG mobile service for backup (significantly less than an annual fix line rental fee, and calls are included, not extra).

    NOTE: If your internet connection isn’t reliable (eg; due to modem issues, firmware, throughput in peak/off-peak periods, insufficient speeds or high latency, line filter problems) then any VoIP service over the connection won’t be reliable. Fix your internet connection before complaining that your VoIP service is un-reliable.

    And for extra uptime if you are in a power affected area, use a UPS for the router/modem and handset if required(eg; base for cordless units).

    • Tim
      Posted 06/05/2011 at 9:46 am | Permalink | Reply

      Good post (albiet long) ;)

      But you mention yourself a laundry list of reasons why voip may not work properly. The end goal should be to develop voip services so they ‘just work’.

      We don’t want to be continually providing tech-support to our parents/grandparents for voip as well!

22. Zag
    Posted 06/05/2011 at 7:14 pm | Permalink | Reply

    It’s a bit silly to be chest pounding about 170,000 VoIP lines and then saying so what are ya gonna do Telstra?

    Telstra doesn’t really need to fuss about retail VoIP services until the NBN is better setup, as many people should already know Telstra already have multi millions of real phone connections right now.

    I suppose Telstra could turn the tables and say to iiNet well we have 15 million plus phone lines, so what are you gonna do about that iiNet and you even use some of them yourself?

    I think the real competition will be in the mobile arena and Telstra can already do VoIP services over mobile phones without requiring extra apps and stuff so its just a matter of Telstra getting their LTE+ network up and running across Australia and then you’ll see people really crying.

    Reminds me of the dail up days where Telstra started doing 100 hours for $10 $20 a month, that made the ISP maket smaller quick smart.

23. Jason
    Posted 08/05/2011 at 8:01 am | Permalink | Reply

    I have a VOIP service with IInet, only the cost attracted me though the quality is a lit short from a great service, mostly use my Telstra mobile for a reliable voice service and also a great backup with the new data plan I can tether the mobile to the laptop. Though its hard to beat naked DSL plan even if the quality of the VOIP product isnt that great. I am happy with the options I have taken or I would have changed if the VOIP option wasn’t expectable

    • Greg
      Posted 09/05/2011 at 2:29 pm | Permalink | Reply

      If your getting better quality over mobile, then you definately do have a problem. Your Voip service should use better voice compression algorithms than your mobile, which is designed to fit lots fo calls into a relatively small wireless channel.

      Wait till HD Voice equipment and Voip becomes more standard and accessible and you will know how poor mobile, then PSTN, then VOIP is…!