www.tatacommunications.com www.capacitymedia.com VoIP Interconnect A guide for service providers making the transition to an all-ip world Published in association with: Published by: publishing
Rich VoIP experience A reputation you can rely on Choose the right partner _ The world s leading TDM/VoIP hybrid wholesale voice network _ Relationships with over 1500 voice providers _ VoIP solutions since 1997 _ Guaranteed interoperability and codec support Take your VoIP business farther with industry and technical expertise. www.tatacommunications.com
FORWARD The voice of the future is here The bridge to the IP future is grounded in strong relationships and leading network expertise Since the potential of the IP protocol to carry wide ranges of traffic types was first recognised, well over 15 years ago, carriers have been viewing voice over IP (VoIP) in one of two ways as an industry threat or a business opportunity. However, despite the decade that has passed since the first pioneering deployment of commercial VoIP, the fundamental structure of the industry has not significantly been altered. Until now, that is. Across the voice industry, providers are investing in next-generation networks (NGNs) that leverage the efficiencies of an all-ip transport core to drive new business opportunities. We are in the midst of a burst of industry activity as carriers begin to execute on convergence, it has become quite clear how VoIP can deliver true benefits to transform the industry as a whole. The rising demand for services like video conferencing forecasts new revenue streams that can result from converged communications. Video, messaging, content, IPTV and more can all be delivered seamlessly over a unified platform to enrich the subscriber experience and increase opportunities for revenue generation. Meanwhile, the efficiency gains that result from IP have been quantified, revealing tremendous potential for a transformational-scale effect. Besides offering cost savings, IP promises to decrease the time required to roll out new services and increase resource utilisation. Nevertheless, significant challenges remain for new entrants into the IP world, including managing interoperability and conversion challenges, and dealing with the lack of native IP interconnects. During the process of transition to an all-ip world, protocol conversion and codec transcoding are significant mandates for managing the seamless integration and interoperability of both TDM and VoIP networks. For service providers looking to move forward with a VoIP evolution, choosing the right partner to drive your IP transition is integral to your success strategy. The right partner can bring hands-on experience to configuring native VoIP interconnects, improved reach to suppliers, high quality of service, and transparent management of conversion requirements. As the world s leading international wholesale voice operator, Tata Communications can provide the network reach that operators look for in a VoIP interconnect partner. Our extensive network of supplier relationships and our industry-leading BestValue Routing TM engine helps our VoIP customers balance price and quality as per their business needs. Our twin heritage of VoIP and TDM networks, and the investment we have made in migrating our TDM core network and interconnects to VoIP, put us in an excellent position to help other carriers do the same, using the best practices we have distilled from our 12-year VoIP heritage. We at Tata Communications look back with pride on our extensive history of VoIP innovation, but what matters most for us is that we continue to be a leader in a dynamic industry. By sharing our knowledge and expertise, we look forward to speeding a transformation to IP that will open a pathway for future industry prosperity. We have written the guide for our colleagues and peers across the voice industry, with whom we have been building relationships for the past 50 years. This guide is a part of our commitment to work with you as a supportive and innovative partner as we move into an IP future. Michel Guyot President, Global Voice Solutions Tata Communications VoIP Guide 2009 01
Our VoIP advantage Innovative and reliable solutions for today s market Outsourcing _ NGN network access without investments _ Improve scale and reach while reducing cost of non-core business _ Streamlined, best-in-class traffic management and network expertise VTS Prime _ One-stop-shop voice termination service _ Assured high-quality terminations _ Leading global coverage Take your VoIP business farther with industry-leading solutions. www.tatacommunications.com
CONTENTS Contents Page CHAPTER 1 4 As operators invest in next-generation networks there s a need to interconnect natively over IP: but the migration of TDM interconnects to VoIP is a barrier to growth CHAPTER 2 8 What are the challenges of VoIP interconnection, and how can they be overcome? CHAPTER 3 11 How should carriers undertake the migration of TDM bilaterals to VoIP? CHAPTER 4 14 The NGN evolution: traditional carriers must engage with the new breed of VoIP providers CHAPTER 5 17 The future lies in native VoIP, so choosing the right VoIP interconnect partner is critical NETWORK MAP Tata Communications global IP footprint IBC CONTACT DETAILS For more information about Tata Communications please contact: Marcelle Ferland Communications Manager Tel: +1 514 868 7272 Fax: +1 514 868 7168 Email: marcelle.ferland@tatacommunications.com www.tatacommunications.com For more information about Capacity magazine Telcap Ltd. please contact: Tel: +44 (0) 20 8549 2449 Fax: +44 (0) 20 8549 1249 Email: info@capacitymedia.com www.capacitymedia.com VoIP Guide 2009 03
The need to interconnect voice over IP An all-ip infrastructure allows operators to benefit from growth in IP services, but the migration of interconnects from TDM to VoIP remains a key challenge Networks are moving inexorably to an all-ip future as growing numbers of telecoms operators invest in next-generation networks. An all-ip core that can efficiently carry multiple types of service, including voice, data, video, content and messaging, makes economic sense, since carriers reduce operational and capital costs by running a single network and a single set of operational and business systems (BSS/OSS). An all-ip infrastructure makes strategic sense, too. It enables operators to capitalise on the revolution taking place in IP services, helping them acquire and implement the higher margin, enhanced services that customers are beginning to look for. In the future, service providers will offer voice as an enhanced IP service. In a next-generation, all-ip network, voice will easily be able to be combined with other communications services, such as video conferencing, with content services, from IPTV to The quicker the market as a whole adopts native VoIP interconnection, the faster all carriers can benefit from VoIP economics and service flexibility social networking applications, and with business applications, such as click-to-call. Of course, there will continue to be huge demand, worldwide, for voice as a standalone service. In most cases, the capital cost of VoIP infrastructure can represent a significant saving as compared to legacy TDM-based networks, which will allow for more competitive voice service offerings in a low margin environment. VOIP INTERCONNECTS Many carriers are convinced by the VoIP business case and the move to VoIP is gaining momentum. Ovum reports that between 2007 and 2012, VoIP international wholesale minutes will have more than quadrupled going from 75B in 2007 to a projected 279B in 2012. VoIP which represented 37% of the overall international voice wholesale traffic in 2007 is expected to rise to 87% in 2012. This statistic shows that the VoIP market is growing up, with an increasing number of carriers able to carry VoIP across their core networks. There is, however, one large barrier that prevents operators from fully realising the potential and cost efficiencies of VoIP: the very small number of VoIP interconnects that currently exist between carriers. Tata Communications, for example in 2008, transported about 24 billion of international wholesale voice minutes of which 50% is VoIP. In common with other carriers in today s market, Tata Communications has to maintain TDM infrastructure in parallel with VoIP infrastructure. It can provide voice services equally to VoIP providers, carriers that haven t yet migrated their core network away from TDM and to carriers that transport VoIP across an all-ip core but haven t yet migrated their interconnects from TDM to VoIP. In an evolving market, carriers must expect to support a hybrid infrastructure, despite the costs involved. However, the quicker the market as a whole adopts VoIP interconnection, the faster all carriers can benefit from VoIP economics and service flexibility. There are considerable benefits to a VoIP interconnection. IP interconnections are more costeffective and quicker to roll out than TDM-based 04 Capacity publishing
CHAPTER 1 INTERNATIONAL VoIP MINUTES (millions) Source: Ovum David James and Mark Giles, October 2008 interconnections, which require more expensive equipment, local loop access lines and longer set-up and testing times. Capacity can be turned up or down over an IP interconnect almost immediately, so carriers can be more responsive to their customers and gain greater control over their business. And a carrier can use the same IP interconnection for multiple services. This reduces operational cost and gives operators business flexibility and quicker time to margin. VoIP interconnection eliminates the quality degradation that occurs when calls are converted from VoIP to TDM and possibly even back again. ROUTING CAPABILITIES As the retail voice market continues to fragment and the number of VoIP providers proliferates, the ability to support IP interconnection will enable a carrier to reach many more suppliers directly. This gives it more choice over the price it pays for capacity and quality to any required destination. However, the carrier will need to weigh up the economics of setting up individual commercial agreements with large numbers of suppliers itself, against working with a VoIP peering Because of the investments Tata Communications is making in its next-generation network (NGN) and BestValue Routing TM system, it is one of the few international wholesale voice players that can give its customers and suppliers direct access to each other, regardless of whether they have VoIP or TDM interconnects partner which can offer an extensive range of interconnects and a dynamic routing capability. Certainly, carriers with TDM interconnects may find their termination costs rising as the world moves to IP. They will need to use partners to get them to the rising tide of VoIP providers and this will add cost and delay to the termination. Tata Communications has anticipated this problem and has been working hard to address it. Because of the investments Tata Communications is making in its next-generation network (NGN) and BestValue Routing TM system, it is one of the few international wholesale voice players that can give its customers and suppliers direct VoIP Guide 2009 05
access to each other, regardless of whether they have VoIP or TDM interconnects. However, not many carriers have the scale in their voice and IP businesses to justify them in following Tata Communications lead. The long-term goal of the industry must be VoIP interconnections. Carriers can exchange VoIP traffic by either using the public internet or a private dedicated connection. Each of these interconnect types has their benefits and drawbacks and it is up to the carrier to decide which connection type best meets their requirements. The public internet supports best-effort packet delivery and this may not be compatible with the latency requirements of some carriers for the delivery of voice and video services. Nor is the public internet as secure as using a private IP connection. There is no routing transparency over the public internet, which means a carrier has no control over how VoIP packets are routed. This can have a considerable impact on latency and quality of service. Serious carriers must make significant investments if they are to provide an acceptable level of latency, quality and security in a VoIP service. IP/MPLS-based NGNs are more flexible than TDM networks as they can support multiple business models simultaneously for different types and levels of service VoIP interconnects that are as secure, reliable and high quality as existing TDM interconnects are not only highly desirable, they are achievable today over private IP connections using MPLS. Such INDUSTRY INITIATIVES ADDRESSING VOIP INTERCONNECTION Three industry bodies are working on the problem of VoIP interconnection from slightly different perspectives. Tata Communications is a member of all three organisations and is actively contributing to the interconnect and interoperability recommendations and specifications standards that they are variously working towards. I3 FORUM The International Interconnect Forum for services over IP (i3 Forum) is the youngest industry initiative to tackle the problem of IP interconnection but they have already developed a set of technical and commercial guidelines that will help carriers migrate from traditional TDM bilaterals to VoIP-based interconnects. i3 Forum is also looking at providing interconnection recommendations for other voice bilateral services such as access services and ISDN. The i3 Forum was set up in 2008 by eight global carriers and already has more than 20 members, including Tata Communications. This fast-moving group will draw on the best practices of its members. Tata Communications is playing a leading role in the Forum because of its unmatched experience in the VoIP market and its technical and commercial expertise in interconnect migration, which it has distilled in its VoIPLink TM product. IP INTERNETWORKING ALLIANCE (IPIA) The IP Internetworking Alliance has its roots in the GSMA s IPX (IP exchange) programme, which originally set out to specify an IP interconnect network for mobile operators selling high-value 3G services. IPX was conceived as a managed, private network that would deliver IP services securely, with agreed levels of quality and differentiated classes of service, and with a revenue model closely aligned 06 Capacity publishing
CHAPTER 1 interconnects allow carriers to maintain the various existing business models they engage in today while ensuring that security, reliability and quality translate into value that someone will pay for. At the same time, IP/MPLS-based NGNs are more flexible than TDM networks as they can support multiple business models simultaneously for different types and levels of service. Migrating to VoIP interconnects has a revenue impact but carriers are likely to improve net margins because of the efficiency gain. They could even gain incremental revenue from enhanced services. MIGRATION STRATEGIES The voice industry urgently needs operators not only to take a hard look at VoIP economics and the significant advantages of native VoIP interconnects, but also to put in place a strategy for migrating to them. Native VoIP interconnects make even more sense for service providers that have already built out an IP core or which have started to build a next-generation network. There are plenty of organisational and technical challenges to overcome: putting VoIP interconnects in place is not a trivial task, as the next chapter of this Handbook explains. However, technologies, solutions and approaches are now available that can significantly reduce the cost and risk of migration. Three key industry bodies (see box) are also undertaking welcome developments that will give the market confidence in the future of VoIP interconnection. In this handbook, Tata Communications distills 12 years experience of delivering VoIP services, implementing VoIP interconnects and building NGNs to show how carriers can successfully manage the transition to the next-generation VoIP world. with network interconnect models in traditional networks. In the IPX hubbing model, an IPX provider uses its large, global footprint to provide high quality interconnections between multiple operators and their IP services, including VoIP, as well as commercial billing and settlement facilities cascading payments, in IPX-speak for participating operators. The industry has recognised IPX s potential to become a more generic standard for high quality, secure IP service interconnection, applicable beyond the mobile domain. Tata Communications has participated successfully in the first real world technical and commercial GSMA IPX trial with a CDMA partner, Telus, and a GSM partner, Telekom Austria. IPSPHERE Like IPX, IPSphere Forum has been working for some time to specify the commercial and technical framework for IP service interconnection. The IPSphere Forum looks at a range of IP services that may need to be interconnected across networks, including content services, such as gaming services and video downloads, and Telco/Web 2.0 mash-up services. IPSphere Forum also aims to support any type of commercial arrangement between service providers, beyond traditional business models, and is proposing an open, SOA-based framework to facilitate new ways of creating service value between parties. It has proposed a carrier interconnection mechanism, the IPSphere Inter-Carrier Interface (IICI), which has quality and security mechanisms as well as a means of transporting payment information between carriers. The IPSphere Forum is most applicable to retail operators with large numbers of end users to whom they wish to offer a range of services, in competition with internet-based portals. Tata Communications participates in the IPSphere Forum and maintains a close watch on its developments. VoIP Guide 2009 07
The challenges of VoIP interconnection What are the factors holding back carrier progress towards the interchange of VoIP traffic? Although there is growing demand for interchange of high-quality VoIP traffic, service providers are at very different stages on the road to VoIP interconnection. Five key challenges are holding back carrier progress. Each challenge can be overcome, but this will require carrier commitment and help from a VoIP interconnect partner. ORGANISATIONAL READINESS FOR CHANGE One of the most serious challenges the voice industry needs to address is its TDM legacy. Many carriers have not yet decided to invest in a next-generation IP network, so IP is not a core competency for them. Such companies are a long way from being able to replace their TDM interconnects. Where a body of IP experience does exist in an operator s organisation, it is likely that it is very much smaller than the operator s pool of TDM expertise. Even if carriers have started migrating their networks to an all-ip core, not all of them will migrate their TDM interconnects at the same time. Some carriers are choosing to keep legacy interconnects because the processes and systems Many carriers have not yet decided to invest in a next-generation IP network, so IP is not a core competency. They are a long way from being able to replace their TDM interconnects interconnect and its bilateral partner then translates the traffic back into VoIP to carry it across its network. A key weapon of persuasion here will be the business case for removing TDM networks and interconnects. The operational costs of TDM, in terms of power consumption, equipment footprint, leased line connections, personnel and field operation staff are significantly higher than IP costs, while equipment supplier investment in TDM is decreasing and their maintenance charges are likely to rise. At the same time, TDM networks and interconnects will not support the enhanced voice services that are beginning to arrive on IP networks. This will begin to make TDM-based carriers less attractive for voice termination. There are also ways of inexpensively acquiring the necessary expertise to implement VoIP interconnects, by working with a partner experienced in building them. Such partners have guidelines and templates that simplify the process Tata Communications VoIPLink TM interconnect service, for example, draws on the carrier s experience of building hundreds of VoIP interconnects. Guidelines for VoIP interconnection are now being drawn up by the i3 Forum, IPIA and IPSphere Forum, and these promise to make VoIP interconnection as straightforward and standardised as TDM interconnection. Although many carriers are clinging onto their TDM interconnects, there is less and less reason for them to do so. that support them, such as network monitoring systems, are well understood. There is considerable organisational resistance to replacing TDM interconnects, even if this means an operator translates calls from VoIP in the core network to TDM through the PERCEPTION OF VOIP AS A LOW QUALITY SERVICE Ten years ago, when VoIP was in its infancy, it did have a reputation for delivering a poor customer experience. When many service providers think of VoIP, 08 Capacity publishing
CHAPTER 2 BESTVALUE ROUTING TM Source: Tata Communications they still think of portal players and other best-effort services. However, VoIP technology has now matured to the point that it is possible to achieve a higher quality of service by using VoIP than with TDM. VoIP carriers can also support finer-grained levels of QoS. The industry now needs to catch up with advances in VoIP technology. Carriers need to engineer next-generation networks and VoIP interconnects to deliver high-quality VoIP services. For example, Tata Communications NGN incorporates innovations that ensures that carriers who pay for high quality including the delivery of caller ID get it. It has built in the ability to collect multiple layers of quality metrics from each of its supplier connections, including IP bandwidth, data flow, packet loss, delay/jitter, round-trip timings and capacity utilisation. Excellent visibility into the network is imperative if Tata Communications is to avoid connections becoming over-subscribed, affecting performance and SLA contracts. Such metrics need to be collected from and correlated between the IP session layer, where the VoIP application runs and the network transport layer. Tata Communications feeds these metrics into its BestValue Routing TM Engine (see box p10) to ensure that customers get the quality of voice termination they need and also into its performance management tools, enabling it to drill down into areas affecting QoS and carry out root-cause fixes. PERCEPTION OF VOIP AS AN INSECURE SERVICE Again, it is true that IP networks can be less secure than TDM networks if they are not properly managed and configured. Fortunately, IP network security technology is also mature and many carriers have, or are acquiring, considerable experience in this area. IP networks should have appropriate authentication, authorisation and access control capabilities in place, protective equipment, including firewalls and support for secure protocols. When building a VoIP VoIP Guide 2009 09
interconnect, carriers will need to understand each other s security infrastructure and how to configure the interconnect so that the same level of security is supported end-to-end. Changes to network equipment must not compromise security. The internal topology of a carrier s IP network addresses must be hidden from its partner(s) with a vital piece of VoIP network equipment: the session border controller (SBC). THE RIGHT BACK-OFFICE SUPPORT IP networks and VoIP interconnects mean changes to back-office provisioning, billing and service assurance systems and processes. If carriers run hybrid IP/TDM networks, they will need operational systems that bridge between the two and treat both as though they are a single pool of capacity. Carriers will need to consolidate CDRs from both networks in order to bill and report on traffic accurately. IP networks generate more data which can be used for business advantage: operators must decide how to collect and handle this data. Working with an interconnect partner that has already transformed back-office systems can help carriers understand what they can keep and where they will need to make changes, minimising the expense and effort involved in migrating to VoIP. INTEROPERABILITY By far the greatest challenge facing carriers that want to implement VoIP interconnects is the lack of settled VoIP standards. VoIP is heavily influenced by the internet world where continuous innovation tends to win out over standardisation. Internet-based signalling protocol standards, for example SIP, are still evolving and vendors implement the SIP standards that do exist slightly differently to gain competitive advantage. Operators have adopted or created distinct flavours of VoIP and there are no settled approaches to the compression or otherwise of VoIP traffic. As enterprises move to VoIP, interoperability issues will only become more challenging given the large number of suppliers in the IP/PBX market, compared to relatively few (but still incompatible) equipment vendors in the carrier-grade VoIP market. To simplify VoIP interconnection, carriers should not have to worry about the vendors, equipment versions, protocols and codecs their partner(s) are using and Tata Communications is on a mission to remove all the complexity associated with VoIP interoperability from its customers and suppliers. Because interoperability has such a large effect on the building of VoIP interconnects, it will be discussed in more depth in the following chapter. TATA COMMUNICATIONS BESTVALUE ROUTING TM ENGINE Tata Communications BestValue Routing TM Engine handles TDM as well as VoIP connections so that Tata Communications can take traffic from any customer and route efficiently to any supplier regardless of the technology either uses to connect. Every hour the BestValue Routing TM Engine looks at the quality and cost/margin on every route for over 1,500 suppliers connected to Tata Communications and it carries out tens of thousands of routing changes. It uses historical information to predict demand in the next hour and assesses the capacity and quality of available supply at code level in order to update its routing tables. The engine takes in price and quality information from customers and matches this with the level of service suppliers can offer, then determines the best way to route customer traffic. The BestValue Routing TM Engine is a core competency for Tata Communications, enabling it to meet customers price and quality requirements profitably, ensuring that Tata Communications remains a viable player in the highly competitive voice market. The fact that the BestValue Routing TM Engine is technology-agnostic means that customers and suppliers get the widest possible choice of routes and both can migrate to VoIP interconnects at their own pace. 10 Capacity publishing
CHAPTER 3 The migration of TDM bilaterals to VoIP There are a number of options and factors to consider for carriers when they migrate their TDM bilaterals to VoIP Carriers moving to all-ip networks will want, at the very least, to migrate their most important TDM bilaterals, which handle the majority of their voice traffic, to VoIP interconnects. They can approach this migration as an evolution, choosing to add VoIP as an alternative gateway to an existing TDM site when they need a capacity upgrade, for example. This means that they don t have to invest in expensive and inflexible TDM capacity and they can gradually migrate away from the legacy TDM interconnect. Or, if a carrier is expanding its network footprint, it can opt to set up a new site with a VoIP interconnect from the start, even if existing sites still use TDM interconnects. Carriers will need to plan their own roadmaps for TDM to VoIP interconnect migration, based on their capital cycles, which will determine how fast they can acquire new technology and build up their IP knowledge base. Carriers also need to take into account their quality requirements when setting up a VoIP interconnect. The public internet can deliver the expected quality for a large segment of wholesale voice customers. However, mobile operators, and retail service providers that demand high quality will want to interconnect in one of two ways: either using a private network environment with dedicated capacity for voice traffic; or using IP/MPLS with its built-in classes of service and security mechanisms. The choices do not end here. VoIP services speak using different signalling protocols. Given Tata Communications history as one of the earliest carriergrade VoIP providers, its core network supports SIP and the legacy TDM-inspired protocol, H.323. Since SIP is newer and more active in the VoIP community, there are new standards and updates to the protocol being developed all the time. Because SIP grew out of the internet community, it is more flexible than traditional communications protocols, so it holds out the promise that new SIP-based communications services can be developed more quickly than has been possible in the past. It will also be easier to build services that combine SIP-based communications with web-based function, leading to greater innovation in the communications market and greater service revenue opportunities for operators. Retail service providers are already looking at services that combine voice with email, for example, as well as with video, voice over IM, collaboration services and enterprise applications. Given Tata Communications history as one of the earliest carrier-grade VoIP providers, its core network supports SIP and the legacy TDM-inspired protocol H.323 Service providers will need to decide which variant of SIP their VoIP application should support SIP-I is currently gaining most traction in the carrier market and whether their VoIP interconnects should be based solely on this protocol or whether they need a more generic facility that will allow it to translate between SIP variants, between SIP and H.323 and even between VoIP protocol(s) and TDM. A session border controller (SBC) supports protocol conversion (see box p12) and is key to overcoming many of the interoperability issues delaying TDM to VoIP VoIP Guide 2009 11
VoIPLINK TM INTERCONNECT VIA SESSION BORDER CONTROLLER Source: Tata Communications An SBC is key to the security and interoperability of VoIP interconnects. It sits at the edge of a network as a demarcation point for security and billing migration. Large international carriers like Tata Communications use SBCs to allow them to handle VoIP traffic regardless of the protocol it speaks so customers and suppliers do not have to worry about the protocol they have implemented in their networks. Tata Communications knowledge of both protocols puts it in a good position to advise customers, whether they are migrating from TDM or older VoIP protocols to SIP, on the best way to implement VoIP interconnects. Its advice is supported both by a set of best practices based on Tata Communications extensive experience of building VoIP interconnects, including best-practice guidelines for selecting and configuring vendor equipment, and by its VoIPLink TM interconnect product. Tata Communications is contributing its guidelines to the work the i3 Forum is carrying out, developing industry-standard recommendations for TDM to VoIP bilateral migration. THE ROLE OF THE SBC An SBC is key to the security and interoperability of VoIP networks and VoIP interconnects. It sits at the edge of a carrier s network as a demarcation point for security and billing purposes, authenticating and authorising traffic passing through the network and carrying out any conversions needed between VoIP signalling protocols. The new generation of SBCs also handles transcoding which is the 12 Capacity publishing
CHAPTER 3 process of translating between codecs, or voice compression algorithms from one to another. The most important function of an SBC however, is that it masks a carrier s internal IP addresses, used for routing and media, from public view. When the VoIP market was in its infancy, carriers started off using media gateways at the edge of the network, with gatekeepers or proxy servers to handle routing. When two carriers set up an interconnect, they would exchange all their media gateway access lists and IP addresses which could grow quickly and become unmanageable. Not only did this exchange represent a security risk, it also made routing to large numbers of partners very unwieldy, especially when media gateways were moved/added/changed and their IP addresses needed to be updated. With an SBC, all this complexity is hidden. Customers and suppliers use one or two interfaces to the SBC which then takes care of any translations needed to route between them. TRANSCODING CHOICES Not only do VoIP carriers and vendors have options for signalling protocols they can use, they also need to decide on the voice codecs (encoding algorithms) that are used for packet transmission. In the VoIP world there are many codecs for carriers to choose from, but none have become the defacto standard that all networks use. Tata Communications currently requires its suppliers to support one of three codecs which it believes have the greatest industry momentum at present: G.711, G.729 and G.723. However, Tata Communications is building the ability to transcode from one codec to another into its NGN. This will allow for network support of other codecs that are gaining popularity in the industry, including GSM AMR, favoured by mobile operators, and ilbc which is used by software application developers. Since it doesn t see the codec incompatibility problem being resolved by the market any time in the near future, Tata Communications, as a carrier, can ensure that a customer sending any codec can properly terminate that phone call to any supplier in the world. As the VoIP market becomes more demanding of quality, Tata Communications reports that growing numbers of customers want their bilateral VoIP interconnects to support G.711, an uncompressed codec which provides a high level of voice quality across an IP/MPLS network. However, few VoIP suppliers have supported G.711 because it requires up to three times the bandwidth of other codecs. As a result, they prefer not to terminate G.711 calls and they either need to be supplied with Tata Communications, as a carrier, can ensure that a customer sending any codec can properly terminate that phone call to any supplier in the world transcoding devices, introducing cost and a potential point of failure, or calls need to be routed through an SBC which carries out the transcoding for them. By interconnecting to a carrier such as Tata Communications that supports this capability, the supplier can be assured they will receive all the potential minutes. However, Tata Communications expects that as the number of carriers able to support G.711 increases, customers will start asking for native end-to-end G.711 termination. IPIA s IPX initiative also requires that carriers engineer into their network the ability to handle calls end-to-end without adding latency through unnecessary transcoding. This means that with its NGN network, Tata Communications is keeping track of which codecs are being used on a call-by-call basis, using this data to inform its routing decisions. The carrier already has a static view of which codecs its suppliers support. But it will also need to be able to route calls dynamically, based on their codecs, to avoid compromising call quality through transcoding. This is not a trivial exercise given that Tata Communications has over 1,000 suppliers each typically supporting the three codecs it mandates. VoIP Guide 2009 13
The NGN evolution Traditional carriers need to engage with the new breed of VoIP providers or risk becoming uncompetitive VoIP will not kill the traditional bilateral model but it is extending the number of partners with which operators will need to exchange traffic. New types of VoIP providers (portals) account for an increasing share of the voice market. Telegeography reports that in the first quarter of 2008, the US had 16.3 million consumer VoIP lines, representing nearly 14% of all US households and more than a quarter of US broadband households. Many of the VoIP providers that operators will need to connect to have been in existence for less than five years and are far outside the scope of a carrier's bilateral agreements. Some operators see the rise of such providers as a threat, believing that they spell the end of voice revenues. In fact, end users will continue to want voice delivered with a guaranteed level of quality and security, so it is highly unlikely that free voice services will displace completely current revenue models. However, traditional operators will need to engage with new VoIP providers directly or risk becoming uncompetitive because they will pay more than they need to for voice termination and deliver a higher latency, lower quality service using multiple intermediaries. End users will continue to want voice delivered with a guaranteed level of quality and security, so it is highly unlikely that free voice services will displace completely current revenue models VOIP PEERING HUBS VoIP peering is the rising model for interconnection between multiple carriers that don t have established relationships with one another. VoIP peering is supported by a peering hub, an interconnect platform operated by a VoIP peering provider. Carriers connect to the hub through a native VoIP interconnect and gain TATA COMMUNICATIONS NGN Tata Communications already has a global, private IP backbone across which it can ensure high quality VoIP connectivity. However, it expects its cost efficiency and performance to improve even further when its next-generation network (NGN), an MPLS-based overlay network supported by Sonus and ZTE softswitches is fully deployed. Tata Communications' new all-ip network is using multi-function Sonus and ZTE equipment to replace its current mix of legacy TDM switches, media gateways and session border controllers. By consolidating its network onto a single NGN infrastructure, Tata Communications expects to achieve cost and performance advantages enabling it to deliver the best quality and value to its customers. The carrier has currently deployed Sonus equipment in a number of sites across the USA, Europe and Asia as well as ZTE equipment in India and has an aggressive timescale for completing its transition to an all-ngn network by mid 2010. Tata Communications' NGN will, from edge to edge, be one managed IP network, engineered to support high-quality voice services. Voice will be transported in dedicated pipes with QoS guaranteed so that Tata Communications can meet the market's highest quality and lowest latency requirements. However, even though the NGN is an all-ip network, it will continue to support Tata Communications TDM 14 Capacity publishing
CHAPTER 4 TATA COMMUNICATIONS NGN Source: Tata Communications access to hundreds of other carriers similarly connected to the hub. There are different business models related to peering, one of which details the peering provider taking care of billing and settlement between carriers when they exchange VoIP traffic across the hub. Other models allow for the carrier to handle transport only and charge accordingly, and all billing and settlement are completed directly by the origination and termination parties. A provider like Tata Communications supports VoIP peering with a next-generation network that is capable of resolving any interoperability problems between partner networks. A VoIP peering hub thus connects many of the islands of VoIP that currently exist in the market, customers. The equipment that Tata Communications is installing is capable of supporting both TDM and VoIP protocols, including all the variants of SIP and H.323 signalling protocols, in the case of VoIP, as well as multiple VoIP codecs. Any carrier connected to Tata Communications today, as a TDM or VoIP bilateral or a VoIP peering partner, can continue with their existing interconnects and, when desired, migrate their TDM interconnects to VoIP over time. Using both Sonus and ZTE, Tata Communications is readying itself to handle any enhanced VoIP service a customer will ask it to carry in the future. Migrating to an NGN is a large undertaking and Tata Communications understands the growing pains and challenges that must be addressed, from retraining staff on new equipment to deploying new hardware and accompanying OSS/BSS systems across a very large global footprint. As a result, Tata Communications is building up invaluable experience it can share with its VoIP partners as they put their own migration plans in place. Partners can also elect to outsource their international network management complexities to Tata Communications thereby enabling them to focus on their core business. Tata Communications is closely monitoring the return on its NGN investment and the benefits it expects to achieve in terms of quality improvements, management efficiency and lower cost, so it can help others understand the business case. VoIP Guide 2009 15
Number portability presents carriers with a large headache. How do they keep track of all end-customer moves and daily number changes within peered operators organisations? enabling any VoIP provider to pass traffic directly to any other VoIP-enabled operator. There are a number of challenges associated with implementing a VoIP peering hub, especially in the current market where industry standards for VoIP interconnection have yet to be established. Issues such as number portability (NP) and routing and addressing (ENUM) need to be resolved (see box below). In the internet, voice end-points are identified by IP addresses and in order to reach them directly, VoIP operators may need to map PSTN numbers to IP addresses using an ENUM database. Routing and addressing of voice traffic is quickly increasing in complexity with the need to query the required routing information from various private and public databases before making routing decisions. Only a handful of carriers are likely to have the experience, technical capabilities, network architecture, geographic reach and large numbers of connected suppliers to become credible VoIP peering providers. NUMBER PORTABILITY AND ENUM CHALLENGES Retail Service Providers (MNOs, fixed, broadband) daily lose and gain large numbers of customers. Many of these customers will keep their numbers when they change providers, thanks to number portability regulation. As a result, carriers can no longer assume that any number in a range once assigned to a particular operator will still belong to a customer of that operator. The customer may have changed provider several times since s/he originally acquired the number. If the carrier routes a call based on a number range, it may find it is paying a high price for termination as the call is passed on from provider to provider until it reaches the customer and of course, quality is also compromised. Number portability presents carriers with a large headache. How do they keep track of all the end-customer moves and daily number changes within peered operators organisations so that they can route calls direct to the right destination? They now need to be able to route on individual phone numbers rather on number ranges, which, in Tata Communications case, means being able to store over a billion phone numbers and having the ability to update this database daily so that numbers are correctly assigned to operators. The number portability database then has to be linked to their BestValue Routing TM Engine. Before taking each routing decision the sophisticated routing engine has first to dip into the database to understand which operator owns the number being called, so that it can calculate the best route according to a customer s quality and price criteria. Since Tata Communications handles hundreds of thousands of calls a second, supporting such a volume of database look-ups is no small task. Tata Communications already has the ability to support number portability-based routing in a number of countries round the world and is working to extend this capability to others. This is part of its commitment to deliver best value to its voice customers. In a VoIP peering context, ENUM adds an extra dimension to the number portability problem. Many VoIP providers hold customer numbers in an ENUM database, making customers addressable across the internet. VoIP peering providers need to gain access to those databases in order to deliver VoIP calls over the public internet and increasingly over private IP networks. A number of models for ENUM access are emerging here. Tata Communications is working on the ENUM evolution and is actively participating in several industry discussions on this topic. Tata Communications is building a routing architecture and the solutions that will handle ENUM-based routing. 16 Capacity publishing
CHAPTER 5 Choosing a VoIP interconnect partner It s clear that VoIP is the future, so picking the right company to work with is critical Migrating to IP and VoIP delivers a wide range of benefits, from cost savings and the ability to offer enhanced services to provisioning flexibility and the convenience of having a single connection supporting multiple services and connectivity to multiple suppliers. Operators can significantly reduce the time and effort involved in moving to IP/VoIP interconnections if they work with an experienced partner that can provide the right expertise and support. This partner should have a thorough understanding of the challenges facing operators as they migrate to IP/VoIP interconnects and convincing solutions to these problems. And operators will want the reassurance that they are working with a carrier partner that is leading the industry in the development of standards for IP/VoIP interconnects, so that the next-generation interconnects they are putting in place will be future-proof. For those carriers that have strong TDM backgrounds and little experience with VoIP, there are solutions in the market that will allow them to bridge into the VoIP world with minimal investment. The SNARC product from Tata Communications is a complete turnkey solution that provides a VoIP gateway for the customer to interconnect into their legacy TDM switch. Tata Communications will manage and maintain the VoIP gateway and the customer is responsible for the cross connect into the TDM switch and must provide Tier 1 IP bandwidth. The solution will enable the carrier to have direct access to all voice services and suppliers in the Tata Communications network. The carrier can use this experience to learn about the VoIP interworkings and allow their staff to become comfortable with the technology. QUESTIONS TO ASK As operators consider how best to migrate away from their TDM comfort zone to VoIP interconnection, they should ask the following questions about potential VoIP interconnect partners: > How many VoIP interconnects has this carrier set up? > How many suppliers can this partner connect me to how extensive a choice can it offer me of termination quality? > How does it ensure that its suppliers deliver the quality of service I need? Does it have a state-of-the-art sophisticated routing engine that guarantees the best routes for my calls according to my price and quality criteria? > Does it support retail quality call completion, with Calling Line Identification delivery assurance and support for the high quality G.711 codec? > Does it have well-established processes, templates and guidelines to help me configure my native VoIP interconnection? > How much work will I need to do to interconnect with this partner do I need to invest in transcoding and protocol translation function or will the partner handle this for me? > Can I go to this partner for advice about what I need to change in my organisation and back-office systems to support the new VoIP interconnect? > If I choose to retain legacy TDM interconnects for the time being will my business be treated with the same level of priority and professionalism? > Has partner got the appropriate provisioning staff who can walk us through the interconnect process and test to ensure full compatibility? As the world s leading international wholesale VoIP Guide 2009 17
voice operator, Tata Communications has the network reach that operators need in a VoIP interconnect partner. It can connect TDM and VoIP customers to over 1,000 suppliers, using its industry-leading BestValue Routing TM Engine to meet both types of customers price and quality criteria equally. Tata Communications knowledge and experience of VoIP interconnection is unsurpassed in the market, thanks to 12 years of engagement with the technology. Our twin heritage of VoIP and TDM networks and the investment it has made in migrating its TDM interconnects to VoIP, puts it in an excellent position to help other carriers do the same, using the best practices that Tata Communications has distilled from its own experience. Tata Communications can offer a set of solutions to support customers in all aspects of IP/VoIP migration and the implementation of VoIP interconnects. Its global NGN, with its dedicated, high-quality voice transport capability, will continue to support TDM customers so that they can migrate to VoIP at a pace that suits their business. Tata Communications global voice solutions, such as VTS Prime, provide reliable, high-quality call Tata Communications knowledge and experience of VoIP interconnection is unsurpassed in the market, thanks to 12 years of engagement with the technology completion with Calling Line Identification delivery assurance for mobile operators and other retail service providers. It is playing a significant role in industry organisations that are trying to structure the IP/VoIP interconnects model while making it easy for partners to connect to its network whatever variant of VoIP they use. And Tata Communications can support next-generation VoIP peering and outsourcing models, enabling customers to choose whatever mix of VoIP peering and bilateral interconnects they need. For example, an operator may set up high-quality, VoIP bilateral interconnects with its top five to 10 partners, which account for 80% of its traffic, while carrying out the remaining 20% of its voice business with a multitude of partners through a high quality VoIP provider like Tata Communications. VoIP interconnection is the future of the voice industry. Operators can benefit from a VoIP future more quickly and with least pain if they choose the right IP/VoIP interconnection partner to help them. In a next-generation all-ip converged network, voice can easily be combined with other end-users' services such as video conferencing and video share as well as with service providers mission critical inter-working and roaming IP-based traffic such as Sigtran. Beyond voice, Tata Communications portfolio of wholesale services includes a comprehensive range of mobile services: from signalling connectivity services, such as SCCP and Wireless Global Roaming, to enhanced roaming services, such as Managed Roaming and Intelligent CAMEL exchange (ICX), operators are able to reduce costs, maximise revenue and improve call services delivery, by migrating to a converged IP-based interconnect supporting their voice, signalling and data requirements. REASONS FOR OUTSOURCING VOIP CONNECTIVITY Over the past five years, a combination of market deregulation and the arrival of VoIP has changed the economics of wholesale voice dramatically. Retail operators that used surplus network capacity to build a wholesale business when termination rates were high are finding their margins dwindling now that competition and new technology have driven prices down. Wholesale voice has become a low-margin, high-volume business. At the same time, the voice market is becoming more complex. New retail voice providers have opened for business, so carriers must make finer grained routing decisions. The larger the number of providers, the greater the variance in price and quality, and this can change on an hourly basis, depending on the time of day. Numbers have become portable or have moved to the IP cloud in many markets across the world, so carriers now have 18 Capacity publishing
CHAPTER 5 HIGH LEVEL TATA COMMUNICATIONS NETWORK Source: Tata Communications to keep track of how customers are moving between operators in order to route calls to the right operators efficiently. In order to remain cost competitive, carriers need to make significant changes to their operational systems, requiring considerable investment for relatively small returns. Large carriers, where international voice is a relatively small component of their overall revenue, are now considering outsourcing this business to a partner with the scale, focus and ongoing investment programme to keep them at the top of the market. By allowing a carrier specialising in wholesale voice to manage their international voice business for them, large carriers reduce their capital and operational expenditures while being able to improve their service to customers. Efficiency gain and direct cost reduction is a large spur to outsourcing for this segment of the market. A second group evaluating the benefits of outsourcing are retail service providers with limited In order to remain cost competitive carriers need to make significant changes to their operational systems, requiring considerable investment for relatively small returns networks that need to focus their resources on their core business and do not have the desire or the capital to extend their geographic reach or physical connections to large numbers of international suppliers. Such service providers nevertheless want to grow their business and this means extending, through an outsourcing partner, their ability to handle international termination as cost-effectively as possible for their customers. Examples of service providers in this category include pre-pay/calling card companies, voice over broadband providers and portal companies. Outsourcing represents a revenue growth opportunity for this set of operators. VoIP Guide 2009 19
As markets deregulated, new market entrants built up national or international VoIP businesses to compete with incumbents wholesale voice businesses based on legacy technology. A number of new entrants successfully gained a significant market share of voice traffic and for a while have been profitable, benefitting from the lower operational costs achievable with VoIP. As wholesale voice is more and more a commodity trading business, however, this group of carriers is facing pricing pressures and threats from incumbents, which are reasserting themselves in the voice market with next-generation, all-ip networks and VoIP services of their own. New entrants are therefore looking at moving up the value chain and developing retail operations. By outsourcing their wholesale operations, they can focus on building their retail business. Retail operators can take advantage of Tata Communications extensive network footprint, gaining a virtual presence in markets round the globe without the need to invest in PoPs Tata Communications network reach, large number of commercial relationships, advanced voice management platform, network design and build capability and willingness to make joint investments with its customers are all strengths it can bring to an outsourcing arrangement. The carrier can manage routing for a large carrier, calibrating its BestValue Routing TM Engine with the carrier s customers cost and quality requirements and matching these against the capabilities of the carrier s set of suppliers. Tata Communications can further carry out selected, or the entire range of, operational functions on behalf of the carrier, including SLA management, dispute resolution, settlement and reporting. Large carriers are then free to redeploy their international voice termination staff in another capacity within their organisation. The carrier can also benefit from a reduced need for staff in other areas of its business, including network operations, engineering and finance, since instead of maintaining relationships with hundreds of supplier partners, these departments only deal with one: Tata Communications. Retail operators can take advantage of Tata Communications extensive network footprint, gaining a virtual presence in new markets round the globe without the need to invest in PoPs. VoIP operators moving into the retail market can similarly take advantage of Tata Communications international network and large number of partner relationships. Tata Communications aggregates traffic from all round the world and sends it to its partners networks, resulting in interesting retail opportunities for carriers prepared to outsource to the company. Tata Communications is also able to help such carriers design and implement further network build-outs and to co-invest in new network deployments so that carriers can establish a presence in a particular market much faster than they could on their own. Finally, carriers can use Tata Communications experience with building NGNs, to migrate their business onto a next- generation platform. As part of an outsourcing deal, they can work with customers to upgrade their network infrastructure with the cutting-edge technology that Tata Communications deploys in its own network, reducing the cost and risk of migrating to IP and VoIP. CONTACT DETAILS For more information about Tata Communications please contact: Marcelle Ferland Communications Manager Tel: +1 514 868 7272 Fax: +1 514 868 7168 Email: marcelle.ferland@tatacommunications.com www.tatacommunications.com 20 Capacity publishing
TATA COMMUNICATIONS GLOBAL IP FOOTPRINT Source: Tata Communications
One IP World What will the future look like? Building the pathway _ IP interconnection _ Converging communications _ Mobile traffic over IP Give your opinion. Drive Change. Build a future-perfect IP world Join the conversation that will shape the future at OneIPWorld.net www.tatacommunications.com