As traditional voice services are under pressure, operators struggle to introduce sustainable business models for VoIP and value-added services. Co-sponsored feature: BT Global Telecom Markets

The migration from TDM to VoIP is gaining traction as operators and communication providers around the globe drive their NGN implementations. They are looking to launch new converged services for their customers to enable collaboration, mobility, and efficient business processes.

But some key issues put the brake on this evolution. A number of new entrants have introduced disruptive business models for VoIP but their approach has not proved sustainable beyond reaping traditional revenues from termination of IP-originated calls into classic networks. True integration of voice into the feature-rich range of web 2.0 applications and services remains virtually impossible as security, QoS continuity, inter-working, data integrity, charging and payment across networks in the IP world are still unresolved. And everyone agrees that offering all this on one isolated network – however big or modern it might be – is not enough to impress and retain an operator’s customers for the long term.

Interoperability has the potential to unlock the vast opportunities that IP-based voice and business services hold for operators and their customers. It addresses security, integrity, relationship building and – most of all – the financial elements of IP interconnection between carriers’ NGN networks. It also provides seamless integration between traditional TDM and IP-based infrastructures to enable an operator’s smooth and CAPEX-friendly evolution. Moreover, it can help operators and providers to create a sustainable and successful business model – which is paramount in today’s tough economic climate.

BT's IP interoperability portfolio helps operators to deploy their IP services, take advantage of convergence, manage call quality for their customers and stay ahead of the competition. They gain simplified access to PSTN, mobile, international and IP networks. As a result, they can generate new revenues without the cost and complexity of dealing with multiple partners. Transactions between providers are simpler and more secure.

This portfolio will take operators and communication providers from a complex segmented market to a world where they can seamlessly connect to anyone and differentiate themselves from their competition with all the flexibility they need.

A modular approach to cater to operators’ specific needs

BT aims to offer a complete range of IP-based services to help carriers and communication providers keep pace with their end customers' requirements. And as all operators are different, BT provides a building-block approach in three layers:

• Inter-provider connectivity through enhanced IPeXchange services
• Numbering and routing in the IP and TDM world (ENUM)
• Core value-added services and open application platforms for operators to create their own services

Across those layers, to optimise all services, BT will provide transaction and clearing, security, and reporting and monitoring.

Translating the protocols via BT’s IPeXchange

The growing market penetration of VoIP is still low compared to TDM. Therefore operators originating VoIP traffic must convert those calls to traditional TDM networks. To achieve this, carriers can invest in media gateways, incurring high capital expense and separate interconnection and termination agreements. Or they can take advantage of the simple and low investment alternative offered by BT's interoperability services.

BT's IP interoperability hub provides a gateway seamlessly connecting IP to IP and IP to classic voice networks. Any platform, switch, protocol or application can connect with any other network via BT, including, of course, BT’s own networks. This allows for true independence of user technology, protocol, network or device. BT’s IPeXchange addresses industry standards and as BT ensures interoperability with all other connected parties, carriers do not need to support all protocols and codecs themselves.

In summary, BT’s IPeXchange for fixed and mobile networks at the core of the interoperability portfolio enables operators to connect to a complex world of evolving technology with a simple, future-proof, low investment approach.

Making the connection – numbering and routing to bridge IP and TDM (ENUM)

A bridge between classic TDM and IP-based voice must be more than a simple mechanism that initiates bandwidth sessions between two end users. Because voice requires accurate handling of users’ telephone numbers, regulatory requirements specify how they are to be managed across directory services, portability and number plans.

Some VoIP offerings try to circumvent these requirements, which tends to create isolated services. A seamless integration has to include both the TDM-based number world and current and emerging IP address methodologies to ensure future-proof flexibility.

In its interoperability portfolio, BT will offer operators least-cost, high-quality and policy-based routing. Numbering plans and number portability are already available in the UK; BT's ENUM service will extend these to other countries and provide translation of E164 phone numbers to IP addresses, as well as security and legal/regulatory compliance.

Enabling operators to create future services through open platforms

Interoperability throws open the gate to a wealth of new value-added services combining voice, content, applications and capabilities. Most of those services will not fit in a successful business model without the provision of security, integrity and charging across network borders.

Instead of creating isolated services, operators and communication providers can use BT’s IP interoperability platform to extend their value-added services across network borders. They can create new bi-lateral and multi-lateral partnerships without significant up-front costs. And they can reap opportunities in changing markets with flexibility and – most of all – with high speed to market. Open interfaces will give operators access to BT platforms and applications, including a suite of new presence-exploiting applications.

Pay and get paid for IP-based services

Effective arrangements for payment settlement are a key component of interoperability. BT aims to support a wide range of models and services based on the needs of the carriers and providers connected to its IPeXchange.

For carriers with existing bi-lateral relationships, BT can manage the interconnecting traffic, leaving settlement of the managed transaction to the two involved parties. Carriers without a direct settlement relationship but with an agreement to interconnect their specified traffic via the IPeXchange can rely on BT to manage and hand the traffic to any accepting carrier, including payment settlement through BT. Also, BT can accept the traffic as a direct transaction partner and the connecting carrier can leave the settlement entirely to BT, getting payments from BT.

Using BT’s modular approach to interoperability, operators benefit from a simple, robust solution to meet their specific requirements. Without the need for major capital investment, it is easier for them to build and sustain their business models. They have the ability to grow and ensure that they are paid for IP services, so they can deliver the flexible, innovative offers their customers want in the 21st century. GTB

Oscar Ruiz, president, BT Global Telecom Markets, comments on BT’s developments in global wholesale. He takes a look at how operators can succeed and how BT can help them stay competitive.

What are the current major trends in telecommunications impacting wholesale?

Oscar: We are all searching for new ways to handle our legacy networks and businesses. Margins are under pressure and traditional revenue streams are still declining so we look to cut costs and provide new services. With an NGN you can deploy new services faster and at the same time make networks cost effective with the simplicity of IP.

We see consolidation of network infrastructures and suppliers for traditional volume and legacy capacity are emerging. In fact, BT Global Services transferred the operations and management of its legacy network platforms to Alcatel-Lucent. Global Telecoms Business magazine honored that initiative with its Innovation Award for achievement in legacy network transformation.

I’d also like to touch on the voice services agreement that BT signed recently with Tata Communications Ltd. It will allow both companies to partner for growth and benefit from our global networks and cost structure advantages. The agreement provides greater economies of scale that will stimulate competitiveness in the international calls market.

Besides consolidation of legacy, what must operators do to stay competitive?

Oscar: A lot of operators, including the global ones, are transforming now. According to our last survey they say they need know-how, insight and help to implement those transformation projects. We also learned that the majority of operators plan to build their transformed networks through sourcing strategies for new-wave technologies and products. In GTM we are not only transforming ourselves to become a new-wave wholesale business, we are also actively helping many operators to run their own transformations to the IP world.

What role does interoperability play in this overall trend?

Oscar: The migration to new-wave services is gaining traction and that is changing the wholesale market. A number of operators are focused on how they can expand into neighboring markets such as media and IT services. They want to offset declining connectivity revenues. In response, BT works to create a feature-rich new-wave wholesale portfolio, from VoIP to Interoperability to value-added services. We also cover flexible bandwidth and IP network interconnection.

All this is important to allow operators to create sustainable business models in the IP space. Voice over IP continues to grow. But the drop-off in traditional voice is not happening as fast as predicted and a number of the current offerings in IP are disruptive. Carriers struggle to make money out of their investments in IP. A lot of the migration towards VoIP is stalled by missing elements for proper interconnect between networks. This requires security, payment and charging capabilities. Interoperability from BT closes the gaps by addressing these requirements. It is the key element we provide to help our wholesale customers thrive with new wave services. GTB