3.4 Billion Reasons for the Government To Go VoIP
A number of people have been talking about the latest buzz in cyberspace which is currently Voice-over-IP or VoIP. I blogged (Government to Go All VoIP) a PICS meeting I attended where this was discussed. In that meeting, Commisioner Ramon Sales mentioned how impressed President Macapagal-Arroyo with VoIP technology as it powers the local call center industry. Now a friend of mine pointed out this interesting article from Inq7.net.
PALAWAN Representative Abraham Mitra said government phone bills last year of more than 3.4 billion pesos are the best reason to pass a bill he authored allowing the use of Voice Over Internet Protocol (VoIP).
“National and local governments combined spent 1.57 billion pesos for landline phones last year and it’s safe to assume that GOCCs spent another 400 million pesos, or half of what they spent for this expense item,” he said.
To address the problem, Mitra said an “institutional cure” was needed — the adoption of VoIP in government offices.
First of all, I do agree with representative Mitra that this is NOT due to telebabad. This is because governance must be provided in all 7,107 islands in the country. Therefore, NDD charges alone should account for a significant amount of these expenses. Having worked with a major government agency for a good deal of time, I noticed that a lot of inefficiency is because most government agencies still use direct lines and don’t optimize their voice networks with PBXes and KTSes. Direct lines are costly for large organizations! Solving these two (2) problems alone can eliminate a good amount of costs.
The first problem can definitely be solved with VoIP. Creating a nationwide data network and integrating government offices voice (with the use of VoIP) and data networks into this nationwide data network can definitely make more efficient use of existing communications resources. The second problem can be solved once these different scattered voice networks become integrated. The elimination of redundant direct lines for more efficient DIOD trunks is a significant cost savings item in itself. Direct lines are sunk costs. They are paid for even if these are used. Use of DIOD trunks allow these agencies to save on direct line costs by consolidating inbound and outbound trunks.
Of course, the use of VoIP is no magic pill. It must be implemented property in order to maximize its effectivity. Also VoIP costs savings is because costs are moved from variable costs (toll charges) into fixed costs (Internet cost). This is only true if there are proper economies of scale. Choice of technology is also very important. The government must push open standards voice-over-IP. A lot of vendors in the market are pushing so called “open standards”-compliant systems that do not operate well with products from other vendors. Governement implementors must be wary of this.
VoIP is definitely a good thing. But as with anything in a free market economy, Caveat Emptor.
PS. The last paragraph of the Inq7 article is not really a problem because network access controls can be put in place to restrict undesirable activities.
