Successfully migrate your international voice business from TDM to IP

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1 As transformation from TDM to IP network technology continues, operators are starting to address the implications of that shift on their international voice business. With a global all-ip environment still years away, operators need IP exchanges to enable IP traffic to transit smoothly between networks and help them unlock new revenue. Successfully migrate your international voice business from TDM to IP

2 TDM to IP migration Operators worldwide face decline in revenue from international TDM estates, pressure from new entrants and the need to ride the mobile data tsunami. They are looking for ways to tackle the challenges, focus their investments and come out on top. The BT Global IP Exchange product can help operators gain access to much needed revenues, defend their customer base and build infrastructure-based services that offer return on their investment. Enabling interoperability and interworking can also help create new commercial relationships in the cloud. These relationships will be critical as end users progress through fast paced technology change with an appetite for innovation, simplicity and highquality delivery. BT Global Telecom Markets 2

3 A complex path from TDM to IP The decline of TDM infrastructure has been accelerating for several years although a substantial installed base of TDM equipment remains. International TDM-based services are under revenue and margin pressure as a consequence of operators adopting IP. As operators migrate traffic towards their new IP platforms to operate at greater cost efficiency, TDM will be increasingly unable to compete purely on a cost basis. The result is a consolidation trend and owners of TDM estates are looking to simplify their supplier relationships to generate even greater economies of scale through capacity savings. A number of factors exacerbate the situation. Most TDM equipment is ageing and becoming costly to maintain, but does avoid the need for immediate capital expenditure. Also, TDM is not designed for efficient delivery of newer forms of traffic like rich content. Moreover, it is expensive to perform codec conversion from TDM to IP and back again, something operators increasingly need to do. The successful move from TDM to IP is critical for carriers. They should sustain traditional services as long as it is cost effective. At the same time they should start tapping into the future benefits of IP. BT Global Telecom Markets 3

4 However, the IP environment is not without challenges of its own. Some of the traditional TDM based services, such as emergency calling, toll services, and inbound services, are not yet fully replicated in the IP world. Enforcing end-to-end IP across multiple networks including seamless number and IP address management is very difficult. In addition, end customers migrate from TDM end points to IP end points at their own pace. For some the process is swift but others may take years as they try to maximise the existing value of their TDM investments by continuing to sweat these assets. Some carriers with large legacy fixed networks still do not see the need to switch from TDM to IP at all. That makes the business models surrounding IP very complex. IP traffic which is not delivered over an end-toend IP network has to have a TDM part at some point in the connection path. This requires new commercials that involve cascading payments depending on the technologies used. When it comes to crossing multiple networks, transit and peering are options, but only if settlement between the operators is agreed and in place. Authentication, authorisation and accounting must be seamlessly enabled across those network borders. Those points lead to substantial uncertainties that affect the market. Operators recognise that they have to make decisions about their infrastructure, while they are seeking to identify which business models will prevail and how long they can successfully leverage their existing TDM estate. Delivering the international IP voice future Interoperability of network infrastructure will be critical for delivering IP services as smoothly and efficiently as possible. A sustainable business model will require careful assessment of all the financial parameters (revenue, cash flow, return on investment, etc.) during the business transformation that accompanies the technological transformation. IP Interoperability enables services to be provided across networks without losing vital parameters that usually are only available in a TDM environment. Pure over-the-top provisioning of voice services lacks security, accessibility and settlement and often does not provide the reach into different OTT domains. Because operators can provide their customers that universal reach, they can compete with over-the-top players and monetise their IP network investments. From another perspective, interoperability supports innovation by connecting the potential elements of new value-added services across networks. Today the end user lives with a confusion of multiple directories, separated calendars and voice mailboxes. On the corporate side, new trends like bring your own device to enhance productivity often stall because security and control end at the network borders. Operators can uncover great potential business by combining value-added services with their own highquality voice services in one package for their end customers. Such a package would deliver a truly unified communications experience, including contact and calendar management and extending to video calling, security, conferencing, multimedia messaging and media-rich entertainment. They will also ask themselves, who will be in a position to help them lower the cost of this overall transition process? BT Global Telecom Markets 4

5 Gaining true interoperability The BT Global IP Exchange platform can help operators find the right answers for the challenges they face. Embedded in an interoperability framework, it eases the TDM-to-IP transition for operators and allows them to focus their investments where they really matter to them. First, the IP Exchange addresses the cost challenges of the migration and enhances the lifespan of traditional infrastructure. Operators can simplify their supplier relationships and consolidate their TDM traffic to prepare for changing incrementally to IP. Lowering the cost of media conversion by hubbing traffic, the IP Exchange also lifts the burden for capital investment and operational expenditure, but also avoids the creation of stranded assets for the operator. As operators flexibly move the edge of their network outwards to BT s Global IP Exchange, operators can lower their capital intensity. As the IP Exchange provides interoperable service and supports settlement in flexible commercial models, carriers and service providers can leverage the IP Exchange to steer the migration of their customers towards IP at their own pace. Second, the IP Exchange allows operators to fully exploit the advantages of end-to-end IP through respective routing capabilities thus ensuring that the complex IP codec universe is well hidden inside the Exchange. This makes future value-added offerings based on passthrough or transcoding possible. BT already supports high-definition voice pass-through. With HD Voice transcoding around the corner, this will also enable high-definition voice conversations between fixed and mobile users. Third, accessibility, security and settlement support, as well as the opportunity to integrate additional services into the landscape of the IP Exchange help sustain the advantages of traditional voice networks within the IP domain and combine them with the agility of IP driven communication services to create a best of breed enhancing the overall customer experience. In summary, the successful move from TDM to IP is critical for carriers. They should sustain traditional services as long as it is cost effective, whilst at the same time they should start tapping into the future benefits of IP. BT can help them in this complex process so they can continue to focus their investments on enhancing their competitiveness in their home markets. It would be wrong for carriers to fully replicate their TDM infrastructure in the IP world. IP Exchanges exist to reduce the need for many international connections by allowing aggregation to lower costs and improve resilience. By Kevin Gunn, general manager of business development at BT Global Telecom Markets BT Global Telecom Markets 5

6 Offices worldwide The telecommunications services described in this publication are subject to availability and may be modified from time to time. Services and equipment are provided subject to British Telecommunications plc s respective standard conditions of contract. Nothing in this publication forms any part of any contract. British Telecommunications plc 2012 Registered office: 81 Newgate Street, London EC1A 7AJ Registered in England No: GTM-CORP-ADV

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