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Carriers Business Case for Migrating to VoIPBy TMCnet Special Guest Lior Aldema, Vice President of Marketing, AudioCodes Background
ILECs (Incumbent Local Exchange Carriers) are now replacing their TDM (Time-Division Multiplexing) class 4 Telephony networks with VoIP networks. Given the success of VoIP based solutions and offerings in the market, class 5 replacement is already planned and a number of additional ILECs are planning to replace their TDM networks and deploy a VoIP network. The trend indicates that there is a sound business case for migrating. The adoption of a VoIP network by ILECs has not been as rapid as CLECs (Competitive Local Exchange Carriers). At present, most VoIP calls made globally are traversing VoIP-based class 4 networks. ILECs, CLECs, OLOs (Other Licensed Operators) and Mobile Operators can all benefit from the migration to a VoIP network enabling the convergence of multiple services e.g. fixed and mobile voice data and video/TV. To VoIP or not to VoIP? Until a couple of years ago, VoIP had been slow to develop in the US and elsewhere. VoIP is currently beginning to show potential within the consumer market. A number of theories have been cited as to why carriers are making the move towards adopting VoIP networks in a declining fixed wire-line voice market. Expense Incurred Carriers’ present TDM networks are no longer sustainable going forward as they are expensive in terms of capital and operational expenses. An example of such an expense is the replacement of a TDM switch (of equal capacity) with IP/Softswitch architecture that can result in substantial operational savings. A number of Class 5 Switches are at the end of their lifespan and require substitution. The updating of TDM equipment is costly and will inevitably increase capital and operational costs. In the pioneer days of VoIP, there was a major motivation for class 4 switches to be replaced by gateways and soft-switches. To date, this along with complete migration of a whole network to an IP one still drives replacement. This occurs when the old class 4 switch expense is incurred and maintenance fees are extremely high compared to the replacement price. To date, the cost of a long distance call made by consumers using TDM networks has been exorbitantly high. IP telephony offers consumers an economical alternative. There will be a shift in the billing process - the billing of time will no longer be a factor, however the billing concentration will be placed on bandwidth and bytes. “POTS” (Plain Old Telephone System) is moving toward a converged network where voice is converged in the data network. Carriers shifting to a data network will include cost effective billing deals in their offering. Services Carriers operating with TDM networks are experiencing the challenges of implementing new services to create additional revenue opportunities. Various appealing applications such as innovative multimedia services are difficult to implement. As offered by NGN VoIP networks, the variety of applications can influence package deals for consumers to be priced more competitively in the marketplace. Carriers are continuously looking for new services and the majority of them if not all, will rely on NGN networks. Currently the various applications are deployed separately within the NGN architecture. The expected IMS architecture will further announce carrier capability to deploy services more effectively. It must be noted that all these services cannot be deployed effectively on a non-NGN (TDM) network. Applications that are gaining attraction include instant conferencing using multimedia environment, unified messaging, find me follow me, ring back tones and gaming, to name a few. The providing of services on a NGN network will boost Class 5 switch replacements. Competitive Edge Carriers with TDM networks have not had the opportunity to enjoy freedom of choice. An open standards-based network element SIP or H.248 controlled and various interfaces allow carriers the flexibility to choose network system vendors for Softswitch or Call State Control Function (CSCF) in an IMS architecture and Media Server and Media Gateway, which they are comfortable with and who will meet specific needs. Rich Capabilities Unlike TDM networks, VoIP networks have the ability to provide richer capabilities and enhanced voice services, scalability and flexibility while being architecturally robust as further being developed in the standard bodies as an IMS architecture for both wireline and mobile networks. Scalability and Flexibility Scalability allows for additional users to be increased on a real time basis. Companies recognize the flux of additional users by supplying boards which are hot inserted into media gateway chassis. An additional option is to enable extra resources by using software keys, recognizing that the majority of hardware cost is invested initially. An example is of a cable company that is increasing its VoIP user base on a weekly level. They will purchase boards and/or keys, insert them and thereby increase the scalability and flexibility of including new users. Architecturally Robust Technology has evolved to the extent that software issues experienced with Legacy telephony have been researched and rectified. A VoIP network can be as architecturally robust as a TDM system. A robust system enables a system to not break down easily and is not influenced by a single application failure. It uses less investment compared to the financing put into the TDM network in order to achieve the same reliability and robustness. This type of system recovers rapidly and maintains well under exceptional circumstances. Additionally an NGN network inherits the basic redundancy and multiple routes available in the IP layer that carries the next generation network. Technology Evolution IP-based systems have enjoyed the same brief evolution interval as computing systems. Legacy systems have historically technologically advanced at five and ten year intervals. Contrastingly, IP-based systems advance and comply with Moore’s law, which is processing capabilities can double every 18-24 months for the same level of capital investment. This leads to increased efficiencies and enhanced capabilities for the creation of new revenue-generating services at shorter intervals than a legacy system. Support Traffic IP traffic requires support from carriers. An increase of VoIP traffic is originating from national or international long-distance carriers, residential local networks, enterprises and mobile networks, all of which are moving to IP-based voice infrastructures. Examples of applications driving new VoIP minutes are Fix/Mobile convergence, Unified messaging, IP Centrex and IP PBX. The Way Ahead The decision for a carrier to adopt a VoIP network entails a number of considerations. These factors are of utmost importance, not only to the customer, but also to the carrier. The eventual aim is to retain the customer by providing new products and offerings which will generate revenue for the carrier. Ultimately, a customer who is pleased with a product and its offering, will continue to utilize it and create revenue for the carrier. Quality Repeat usage by a consumer will be judged by the satisfaction gained from the quality of the VoIP network. Quality testing is currently being conducted via companies specializing in voice quality testing, an important point to communicate to customers. Using the correct equipment will ensure a better voice quality, i.e. quality of service mechanisms, voice compression protocols, voice gateway features, etc. Security There has been scepticism surrounding security of VoIP networks. Service providers are investing in this area and would require further convincing that there is a security presence before massive class 5 replacement can take place. A disadvantage of migrating to the IP world, is VoIP SPAM. Class 4 switches have been fully isolated in an internal network and therefore less exposed to the security aspects. Packet Cable organization as an example, has fully defined the protocols and methods to be used in order to enable secure operations in the control and media planes of the NGN. Interoperability Not all variants of a similar protocol are interoperable, i.e. carriers should ensure that their voice customers can connect to other customers both internally and externally. Leading edge VoIP equipment is interoperability rich allowing multiple protocols and Softswitches to be interoperable with multiple Gateways. Conclusion There is industry talk that a number of carriers who had initially selected vendors for packet switching gear are investigating additional suppliers. Being early days for VoIP, this type of competition will drive further product innovation/application/services and could potentially increase competition for vendors. Facts, analyst reports, market predictions and current market conditions are all leaning towards a higher adoption rate of VoIP. Carriers who were slow to adopt VoIP are quickening their pace to appropriate the latest innovations and applications that the market has to offer. An additional factor is the availability of Legacy equipment is slowly being phased out. TDM switch vendors are beginning to announce end-of-life for their TDM equipment. The business case is still to be proven, however the migration of carriers to VoIP seems to be the way ahead in the industry. |