Transcript gregorik-voip - Security Audit Systems

Lighting the Way in the New Economy
Voice over IP
Myron Gregorek
Director – Strategic Marketing
Service Provider Networks
Packet Voice
 What is packet voice?
 How big is the market?
 What are the requirements to be
successful?
 Is it profitable?
 Why is Lucent best suited to help you
succeed?
3
What Is Packet Voice?
 Solutions which support traditional voice
services using data-centric network
elements and support structures
– Gives service providers an integrated
infrastructure
– Enables new, differentiating services by virtue of
a common multi-service infrastructure
4
What Is Packet Voice?
 Protocols include –
– IP or internet protocol
• Uses either the internet or a private, IP-based
data network
– ATM or asynchronous transfer mode
• Uses ATM protocol, which also supports video
• IP can ride over ATM
– Frame relay
– IP over Photonics
5
Carrier Opportunity Overview
 Current voice communications market exceeds $600
billion
 Undeniable cost advantage over PSTN > 10 to 1
 Opportunity scales
– PC based voice, limited scalability and profit
– Fully integrated solutions, high profit
 Huge business demand for voice cost savings and
new high value network services
 Explosive VoIP market growth
6
Analyst Predictions for Growth
 Internet telephony will account for 12.5 billion
minutes of use by 2001
InfoTest International
 VoIP will represent 13% of global traffic by 2002
Frost and Sullivan
 VoIP will be an $8 billion business by 2003
Killen and Associates
 28% of all fax traffic will go over IP by 2001
Probe Research
7
Opportunity for Packet Voice
Penetration Will Reach 11% of Long Distance Minutes
30
24.39
Billions of $
25
CAGR 1997-2002
103.4%
20
15.65
15
Small Business
4.10
5
0
Medium/Large
Business
8.53
10
.44
.43
.70
1996
1997
1.89
1998
1999
2000
2001
Source: IDC Packetized Voice Services Market Assessment and Forecast
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Residential
2002
Greatest Potential –
North America, Europe
Long Distance IP Voice Service Revenues
Africa/Middle East
South America 2%
Asia Pacific
2%
12%
Europe
N. America
Europe
33%
N. America
51%
Africa/Middle
East
Asia Pacific
2002
Source: Killen & Associates
9
South America
Packet Voice Market Drivers
End-user Demands
• Lower cost voice service
• MultiMedia services
• Simplification
• Regulatory cost avoidance
Carrier Demands
• Lower start-up and operating costs
• Differentiated services
Technology
• Improved compression techniques
• Improved silence suppression
• Enhanced prioritization schemes
10
Service Provider
Critical Success Factors
Former World
Current World
To line of demarc;
(And Sepr. Inter & IntraLATA)
Intelligent inside plant to
points of aggregation
Services
Voice first; Data a
special kind of voice
Data first; Voice another kind of data
Pricing
Defend price of bandwidth
Maximize customer value
Sales
Product-based
Solution-based
Boundaries
Innovation
Source
Tens of firms
(min. integration value)
Thousands of firms
(major integration value)
Pace
Moderate
Rapid - survival of the quickest
Business
Model
“Do it yourself” vertical integration
Flexible combinations of in-house and
partner capabilities
Succeeding in the New Data-Centric Telecommunications Industry
Requires a New Set of Capabilities Deployed in a New Business Model
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Source: Technology Solutions Company
Total International and Domestic
Voice Over IP Minutes of Use
Billions of Minutes
160
151.70
140
120
100
83.70
Domestic
International
80
60
41.20
40
16.75
20
1.09
1.08
5.84
0
1996
1997
1998
1999
2000
2001
2002
IDC forecasts 152 billion MOUs will be carried over packet-based networks
in 2002, representing 11% of all international and domestic (interstate)
circuit-switched and VPN based traffic
12
Source: IDC Packetized Voice Services Market Assessment and Forecast
Total International and Domestic
Voice Over IP Revenue
30
25
Billions of $
24.39
20
15.65
Domestic
International
15
8.53
10
4.10
1.89
.44
5
.70
0
1996
1997
1998
1999
2000
2001
2002
International represents the majority of Total Voice-Over IP Revenues
to Assessment
reach $24
billion by 2002
Source: IDCwhich
Packetizedare
Voiceestimated
Services 1997 Market
and Forecast
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Source: IDC Packetized Voice Services Market Assessment and Forecast
Voice-over IP Minutes of Use
& Share by Segment
1996
1997
1998
1999
2000
2001
2002
MOUs (Billions)
Med./Lg. Business 0.36
Small Business
0.10
Residential
0.63
0.72
0.17
.91
2.99
0.64
2.85
9.74
1.62
5.39
24.12
4.33
12.75
47.70
9.60
26.39
84.69
18.76
48.25
TOTAL VOIP
MOUs
1.09
1.80
6.48
16.75
41.20
83.70
151.7
Share (%)
Med./Lg. Business 33.5
40.0
46.1
58.2
58.6
57.0
55.8
Small Business
Residential
9.6
50.4
9.9
44.0
9.7
32.2
10.5
30.9
11.5
31.5
12.4
31.8
8.9
57.7
Residential customers are expected to be the heaviest users of packetized
voice services early on, however their share is expected to decline as
businesses adopt services internally or externally via an ISP or alternate provider
14
Source: IDC Packetized Voice Services Market Assessment and Forecast
Voice-over IP Pricing
Average Price Per Minute ($)
1996
1997
1998
1999
2000
2001
2002
International
Circuit Switched 0.62
VPN
0.65
0.57
0.60
0.53
0.55
0.46
0.50
0.42
0.45
0.39
0.40
0.35
0.35
Domestic
Circuit Switched 0.12
VPN
0.05
0.11
0.05
0.10
0.05
0.08
0.04
0.07
0.04
0.06
0.04
0.05
0.04
Note: Figures estimate the average price per minute for international and domestic
VOIP traffic representing circuit switched and VPN migration.
Source: IDC Packetized Voice Services Market Assessment and Forecast
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Packet Voice Solution Types
 Low cost internet telephony
 Full service packet voice
 Data centric long distance
 Tandem replacement
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Low Cost Internet Telephony
The Problem We Are Solving
 Low cost internet telephony provides
carriers with inexpensive
IP networks for voice services
 End-users access the service with
a standard phone, fax, or PC over
the PSTN
Target Carriers
Primary: VON start-ups
Secondary: Incumbents targeted for trials
17
Low-cost Internet Telephony
Provides long distance
at a fraction of today’s
costs
IP/ATM
Switch
IP-based
Private
Network
Access
Mgr
Internet
Billing
Server
VoIP
VoIP
Gateway
Gateway
EO
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EO
Table stakes:
Low-Cost Internet Telephony
 Allow end-users to maintain current calling
behaviors
 Control latency to ensure voice quality
 Carriers must earn margin on revenues of 5.9 to
7.5 cts/min. For US calls
– Cost of $1000 per port, declining rapidly
– Scalability beyond one T-1 / E-1
 Mechanism for terminating traffic to other ITSPs
and inter-company billing
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Full Service Packet Voice
The Problem We Are Solving
 Full service packet voice provides carriers the
ability to offer low cost, reliable local and long
distance voice and data services over IP networks
 Carriers incur significantly lower start-up costs
when compared to traditional switched circuit
networks
Target Carriers
Primary: CLECs
Secondary: RBOCs entering new markets
20
LD Access Charges and
Packet Voice
IXC
ILEC “B”
ILEC “A”
$30B per yr
Revenue/Cost
$0 to $.003
per min
$0 to $.01
per min
IP
Internet
Mega POP
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Mega POP
Voice Is A Prime IP App
Next Generation Access
IXC
ILEC “B”
ILEC “A”
$30B per yr
Revenue/Cost
$0 to $.003
per min
$0 to $.01
per min
PBX
IP
Internet
GR-303
LAN
IAD
DSL
ISP Mega POP
ISP Mega POP
IWF
LAN
Video
Cable
Wireless
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IP
Svcs
IP
Svcs
3G Mobility
Full Service Packet Voice
IP/ATM
Switch
Allows carriers
to save 40%!
IP-based
private
network
MAX
TNT
VoIP
Access Server
Unbundled
loop
MDF
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Internet
Class 5 switch
VoIP
Colocated
Gateway
LEC End
Office
EO
Data-centric Long Distance
The Problem We Are Solving
 Data centric LD provides carriers with an
integrated long distance network capable of
providing multiple services (voice and data) over a
data backbone
 Carriers can significantly reduce their operating
expenses by integrating their networks and
OS systems
Target Carriers
Incumbent IXCs(or start-ups with high growth expectations)
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Long Distance Services
Athens
voice network
Athens
VoIP Gateway
IP
PC/Web
client
Munich
voice network
VoIP Gateway
National or int’l
frame/ATM
core network
Munich
IP
PC/Web
client
New York
VoIP Gateway
New York
voice network
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Gatekeeper / Softswitch
Value Proposition:
Data – Centric LD
 Consolidates voice and data services on
one integrated network
– OA&M integration reduces operational
expenses – 7.6%
– Data core vendor neutral
 Reduces facilities costs
– Improves trunk utilization by consolidating traffic
over shared facilities
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Value Proposition:
Data – Centric LD
 Reduces toll switching requirements
– Reduces toll port requirements by consolidation
in feature server
 Leverages embedded base
– Maintains link to IN platform via intelligent
feature server
– Creates interoperability with other vendors toll
and data switches
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Tandem Replacement
The Problem We Are Solving
 Tandem replacement provides carriers facing
tandem circuit switch growth with a “future-proof”
data-base alternative network for aggregating and
carrying both voice and data traffic
 The tandem replacement solution is used in lieu
of an access tandem switch in a local exchange
carrier
Target Carriers
Incumbent LECs
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Toll Tandem
Switch Replacement
Toll Tandem applications allow the backhaul of Trunks
between IXCs’ POPs
Apex 8000
IXC- A
POP 1
IXC-A
Trunks
IXC-A
Trunks
IXC- A
POP 3
MAX TNT
IXC- A
POP 2
IXC- B
POP 1
IXC- B
POP 2
IP
IXC-A
Trunks
IXC-B
Trunks
MAX TNT
IXC-B
Trunks
IXCB
Trunks
Gatekeeper/ Softswitch
MAX TNT
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Apex 8000
IXC- B
POP 3
Tandem Replacement Solution
IN SCP
Unified Integrated Network Management
Signaling System 7
Network
STP
EO
EO
STP
Intelligent
Feature Server
& Connection
Gateway
ATM / IP
ATM / IP
VoIP Gateway
VoIP Gateway
ATM Core
Switch
IP Switch
ATM or IP Core Network
Acronyms:
EO - End Office
NarrowBand signaling
Packet Network signaling
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Value Proposition: Tandem
Replacement
 Avoid new investment in circuit switch to
accommodate CLEC growth
 Reduces operational expenses associated with
tandem switching
– Study indicates savings of 6.5% or $72 million
 Achieves savings via trunk group consolidation
– Avoids addition of new tandem; Save facilities costs
 Tandem circuit provisioning reduction or
elimination
– Via dynamic, flexible, ATM bandwidth management
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Lucent Softswitch Advantage
Evolution
Toll/Tandem
Local/Access
3rd
Apps
Party
Innovation
Revolution
Softswitch
Suite
Tandem/Toll
MultiService
MultiService
Lucent
Softswitch Suite
UM
IMATM
ATM Vortals
CRM
Local/Access
Location
Common Open API
Wireless Access
5ESSTM
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Intelligence Control Protocol
Wireless Access
ICD
BB Access Tandem 3G Wireless Optical Intelligent
RAS
– DSL
SoftWave Caching
Modem – Cable
Control
Control – BBFW
User Expectations of
Packet Voice
Essential
83%
Required
17%
Not Required
3%
Essential
55%
Required
42%
Service Level
Agreements
/Performance
Guarantees
Source: Yankee Group
33
Network Planning
and Design
Internet Telephony
Applications and Services
 Internet voice telephony
– Traditional telephony services (call waiting,
caller ID, call forwarding)
 Internet FAX
 Internet directory (yellow pages)
 Internet messaging
 Internet audio conferencing
 Internet video conferencing
 Internet call center
 Internet multimedia collaboration
34
VoIP Clearinghouse Service
Settlement Service Provider
Clearinghouse with OSP
(Open Settlement Protocol)
Local PSTN 1
voice network
Regional
VoIP provider
“ABC Call, Inc”
Gateway
Routing
call detail records
IP network
ABC Call’s NOC
API
Gateway
MVSE
OSP module
API
Billing
server
Gatekeeper / Softswitch
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Regional
VoIP provider
“AcmePhone, Ltd”
AcmePhone’s NOC
MVSE
OSP module
Billing
server
Local PSTN 2
voice network
Gatekeeper / Softswitch
Evolution of Integrated
End-user Services
Collaboration
Conferencing
Industry
Timeline
1999-2002
Unified Messaging
Internet Call Waiting
1998-1999
Internet Call Center
Internet Voice Telephony and Fax
1997-1998
New packet voice services bring higher margins
36
Why Lucent for Packet Voice?
Summary...
 End-to-end solution incorporating products and
services
 Best-suited to link narrowband and broadband
networking capabilities
 Multi-vendor strategy
 Leverage embedded base
 Best-suited for scalability and reliability
 Bringing the reliability and quality of voice to data
networks
37
Thank You