Transcript IS-3 - TMCnet

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IS-3: Crossing Borders: Successful
Strategies For International Expansion
Frank Estes
[email protected]
770-671-1888, ext. 224
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Company Overview
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Founded in February 1997.
Developed OSP with with major telephony vendors in 1998.
Product offering in commercial service since March 2000.
Industry leader in OSP solutions.
Open solutions developer.
OSP is in use by AT&T, WorldCom, NTT, Primus, Fastconnect, and others.
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The Constraining PSTN
Today, service providers maintain two distinct and separate networks; one for delivering
data traffic and another for voice traffic. Each network requires its own equipment, circuits
and customer care systems. However, the declining economy and lack of capital investments
budgets are causing carriers to look at core transport models and a single point of access for
data, voice and other new communication mediums.
Carriers are seeking to:
- operate one network;
- consolidate voice and data traffic;
- deliver new services to their customers quickly and efficiently, and;
- move the higher margin voice traffic onto the existing, lower cost IP networks
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Today
Service Provider’s Today
IP Backbone
PSTN
Class 5 Switch
Data
Switch
Gateways
Class 4 Switch
Access network
Data
Services
Multi
Service
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Voice
Services
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“Show Me the Money”
Billions US$
1,400
1,200
1,000
Revenues Comparison
Year 2003 : Data service revenue will retain only 1/7 as Voice
Voice
Data
800
600
Source : Internet Telephony Gateways
[Action Information Services]
400
200
0
1997
1999
2001
2003
Year
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Market Challenges
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Service Providers (SP’s) need to maximize geographical service coverage to enable
any subscriber to reach anywhere.
SP’s need a solution which is future proof (H.323, SIP, …).
Privatization and deregulation are increasing competition and competitors.
IP Packet Networks cost significantly less to build, maintain and operate. Yet,
service providers need a solution which allows future development, but does not
cannibalize existing PSTN investments.
Integration of existing OSS and BSS systems into time tested and proven legacy
systems.
The VoIP market in 2001 was worth 9,634 million minutes of traffic, an 81.5%
increase from the previous year (source: TeleGeography, Inc., 2002).
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Current Market
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Greater than 90% of VoIP traffic uses H323 (Source NTT Comm.)
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The economic advantages of packet telephony are driving both the access and core
networks away from Circuit switching towards packet. Carriers are moving voice
services to packet networks to reduce upfront and operational costs. A recent study
found that packet voice equipment was 70% less expensive than traditional voice
equipment, and data access lines were 60 to 80% less expensive than voice lines. In
addition, maintenance of packet networks was 50% lower, while provisioning was
in excess of 70% less (Source AT&T).
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Developing solutions based on open industry standards will unite an otherwise
fragmented market and allow the industry to focus on serving customer needs
through better quality features and value-added services (Business Week).
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Current Market
 Voice remains the killer application, as old habits are hard to change
(Usage vs. flat rate).
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Current Market
BoIP
BoIP::
Bubble over IP
 The Telecom market is recovering from “BoIP” as the speculative amateurs are driven
from the market and Telecom professional no longer fear the venture and capital funded
amateurs. The Telecom companies are investing in proven technology that compliments,
not revolutionizes their current infrastructure and back office systems.
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A Market Solution!
What do Service Providers need in order to meet today’s market requirements?
An open, secure, scalable IP inter-connection solution which can be easily integrated with the
existing PSTN network, network expansion plans, and proven external provisioning and billing
systems.
"Our VOIP strategy using OSP has enabled us to expand our global network coverage
while minimizing the investments required in international fiber optic cable facilities,
circuit switches, and other costly network equipment associated with the expansion of a
traditional circuit switched network."
John Melick, President, Primus Telecommunications, November 6, 2001.
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A Market Solution!
On October 10, 2002, NTT Worldwide Telecommunications Corporation (NTT-WT), a
wholly owned subsidiary of NTT Communications Corporation (NTT Com) will launch
a multi-protocol/multi-vendor compatible VoIP service for interconnection among
carriers/Internet Telephony Service Providers (ITSPs) that use different types of
protocols and VoIP equipment.
The global VoIP market has been growing rapidly and it is expected that IP telephony
will become the next generation network (NGN). However, difficulties in
interconnection among different VoIP protocols and vendor equipment have been a
major obstacle in the service development of VoIP.
NTT Communications Clearinghouse (NTT-CH), provided by NTT-WT, will offer a
new VoIP clearinghouse service eliminating this barrier …..
TOKYO, JAPAN –– On October 10, 2002, NTT Communications Press Release
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The New Public Network
OFF NET
DATA
PUBLIC
INTERNET
PSTN
C
U
S
T
O
M
E
R
S
POP
POP
POP
DSL
POP
ON -NET
High Speed, Optical Core
ATM
POP
Cable
POP
POP
POP
OFF NET
VOICE
Open Standard
Exchange
Mechanism
POP = POP or CO
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VOICE
Partner
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An Example of International Expansion
Attachment
NTT Communications Clearinghouse Platform
New Clearinghouse servers
New
Billing
system
CDR
Service
Service Order
Order
Monitoring
Monitoring
System
System
CDR
Existing
Clearinghouse
server
Protocol conversion equipment
international leased circuits (IPLC) or Managed IP-BB*
Vendor C
H.323
GW
Vendor D
H.323
GW
Vendor B
H.323 GK
H.323
GW
H.323
GW
Vendor E
H.323 GK
H.323 GW
H.323 GW
Vendor F
SIP Server
SIP
Client
SIP
Client
Vendor A
H.323 GK
H.323 GW
H.323 compatible gateway keeper
Session Initiation Protocol server
VoIP ? voice over IP) gateway
Call detail record
H.323 GW
Vendor A
H.323 GK
H.323 GW
H.323 GW
Existing clients
New clients
H.323 GK:
SIP Server:
GW:
CDR:
…
* Internet can be used if the quality is confirmed.
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Case Study, VoIP Expansion Value Proposition
Circuit Switched Network
Open Standard VoIP Network
- Capital Investment (HIGH)
- Capital Investment (Low)
- Interconnection Cost (bandwidth)
(High)
- Interconnection Costs (bandwidth)
(Low)
- Separate Voice and Data Networks
- Digital Security
- One Network
- Multi-protocol and open
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By the Numbers
Traditional Next Generation
PSTN Carrier Packet Transition
$ per Month
$ per Month
Carrier details
Four POP's Interconnectivity w/ E-1 connectivity
(London, New York, Los Angeles and Tokyo)
$290,000
Four POP's Interconnectivity w/ IP connectivity
$22,800 (London, New York, Los Angeles and Tokyo)
(6 Mps, per UUNET)
Connectivity Costs:
2 Million Calls
5 Million Calls
10 Million Calls
$0.14500
$0.05800
$0.02900
Connectivity Costs:
$0.01140 2 Million Calls
$0.00456 5 Million Calls
$0.00228 10 Million Calls
Additional POP
One E1
$48,000
$5,700 One 6 Mps, UUNet
Connectivity Costs Additional POP:
2 Million Calls
5 Million Calls
10 Million Calls
$0.02400
$0.00960
$0.00480
Connectivity Costs Additional POP:
$0.00285 2 Million Calls
$0.00114 5 Million Calls
$0.00057 10 Million Calls
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By the Numbers (continued)
Connectivity Costs
$0.16000
$0.14000
$0.12000
$0.10000
$0.08000
$0.06000
$0.04000
$0.02000
$0.00000
E1 Voice Circuits
($48K ea.)
IP Packet Circuit (6
Mps $5.7K)
2 Million Calls 5 Million Calls
10 Million
Calls
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Case Study: Live Network Implementation
Global Clearinghouse
OSP
Server
GCH Settlement
Back-end Systems
(6) CDR
Retail AAA
(3) Call Routing/
Authorization
request &
response
(6) CDR
AAA
(6) CDR
(6) CDR
(6) CDR
(2) Authentication
(4) H.323 Call Connection
(1)
Gateway/Gatekeeper
(Member A – Call Origination)
(5)
Gateway/Gatekeeper
(Member B – Call Termination)
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TransNexus Information
Thank you, Merci Beaucoup, Danke, Danku, Gracias
Frank Estes
Vice President
TransNexus, Inc.
678-358-5251 (cellular and office)
[email protected]
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