2

Integrated Carrier-Grade Platforms:Lowering Entry Barriers for New Voice over Broadband Service Offerings

Randy WatersRandy WatersFounder and Chief Technical OfficerFounder and Chief Technical Officer

www.carriustech.comwww.carriustech.com

3

Voice Over Broadband (VoBB) promises to provide more competition in the telecommunications service space. However, for VoBB services to be successful, they must offer high-quality service and be economically feasible for providers to deploy them. “Traditional” carrier-grade distributed approaches to deploying next-generation VoBB services include multiple elements such as softswitches, media gateways, signaling gateways, and application servers. These solutions are costly and do not promote the entry of new smaller providers to the marketplace to introduce competition. Intelligent and scalable carrier-grade platforms that offer tight integration of various components (app servers, media gateways, signaling gateways, media servers, session controllers) will be required for emerging VoBB service providers to quickly and economically get a foothold in the marketplace. This presentation will explore and different approaches for new entrants to deploy new VoBB services.

Session Topic

4

2. Enable new2. Enable new IP services IP services (Increase ARPU)(Increase ARPU)

Gro

wth

Time1.1. IP-enable legacy IP-enable legacy infrastructureinfrastructure(reduce cost)(reduce cost)

Service Provider Dilemma

5

Broadband Services GrowthBroadband Services Subscription

010,00020,00030,00040,00050,00060,00070,00080,000

2002 2003 2004 2005 2006 2007

Year

Su

bsc

rip

tio

ns

(000

)

United States

Western Europe

Asia/Pacific

Source: IDC, August 2003

CAGR: 23-36%

6

The Rise of VoIP

Source: ING Estimate, ING – Voice over IP: Targeting Broadband, November 2004

7

0

50

100

150

200

250

2003 2004 2005 2006 2007 2008Source: Probe Research, IDC, March 2004

VoBB Lines

Bro

adba

nd S

ubsc

riber

s

BB Data Only

Global VoBB Subscriber Penetration

8

Voice Over Broadband

Broadband Access

Internet

Cable DSL

IP Phones

Circuit-Switched Network

MGW

Border Control

Application Server

Broadband Infrastructure Service Provider

VoBB Service Provider

Other Services

VoIP Network

OSSBilling Server

Ownership of broadband access transport infrastructure not required!

9

Why the VoBB Model?

Voice still dominates service provider revenues Voice now a commodity service – prices dropping Regulatory constraints discourage enhancements to

circuit-switched access network Bundling services required to retain customers Fiber rollouts for video underway – big broadband pipes Access transport ownership not required to own

customer Vonage validated the business model Now being adopted by carriers worldwide Plays to Residential & Enterprise markets

10

VoBB Changes the Game

Specialized service providers can enter market Cost of market entry much less than old model

Avoids expensive access costs and fees

Can focus on service & feature differentiation Wireline carriers can serve wireless subscribers Wireless carriers can serve wireline subscribers Redefines carrier competition

11

SS7

Fixed-Mobile Convergence

Internet

Circuit-Switched Network

MGW

Application Server

Broadband Access3GPP UMTS RAN 3GPP2 CDMA RAN

Dual-Mode

Wi-Fi

Core IP Network

Core IP Network

SGSN GGSN PDSN

Multi-Media Services

Other IP Networks

Border Control

SCPSCP

IMS MMD

Border Control

WIN/CAMEL IN Services

Flat Rate Plans imminent Wireless subscribers

surpassed wirelines in 2001 ARPU declining since 2000 Increase network efficiency Reduce OpEx Migrate to All-IP network

IP Multimedia SubsystemMulti-Media Domain

12

VoBB Service Provider Entrants

RBOCs, ILECs, CLECs, MSOs, IXCs, ISPs, ITSPs, VNOs

Mostly residential consumers today

Expanding to enterprise Consolidation will slow entrant

growth over time Current solutions based on

multiple supplier systems Large SPs can integrate systems

RBOCs, ILECs, IXCs, MSOs New or smaller SPs less inclined

to integrate VNOs, CLECs, RLECs, ISPs, ITSPs

Source: IDC - US Hosted IP Voice Services 2004-2008 Forecast : VoIP Invades the Enterprise, September 2004

Mid 2004 Mid 2005

30

60

VoB

B S

ervi

ce P

rovi

ders

13

Emerging VoBB Service Providers Quick market entry Serve growing specialized market Focus on compelling feature/service

differentiation Minimize integration efforts Minimize CapEx and OpEx Enable broad range of features & services

Solution: Solution: àà la carte bundling of VoBB components la carte bundling of VoBB components

14

VoBB Network Components

MTAIAD

Application Application ServerServer

Media ServerMedia Server

Trunking Trunking SoftswitchSoftswitch

OSSOSS

PSTN POPPSTN POPCity ACity A

Trunk GWTrunk GW

Trunk GWTrunk GW

Trunk GWTrunk GW

Public InternetPublic Internet

VoBB Service VoBB Service ProviderProvider

PSTN POPPSTN POPCity BCity B

PSTN POPPSTN POPCity CCity C

MTA

IAD

PBX

Broadband – DSL, C

able, T1

Broadband – DSL, Cable

Any service provider can offer VoBB with Internet access to broadband subscriber

VoBB Service VoBB Service Provider IP Provider IP

NetworkNetwork

Other VoIP Other VoIP NetworksNetworks

Border Border ControllerController

Key Components

Application Server Trunking Gateway Trunking Softswitch Session Controller Media Server IAD

15

Network Integration Issues

Seamless call flow and feature interworking End-to-End IP network fire-walling Nat traversal Inter-system and network IP security Cohesive network management OAM&P interworking Network operations Cohesive operational training and

documentation Responsive customer support

16

VoBB – Bundled Systems

Application ServerApplication Server Media ServerMedia Server

Session ControllerSession Controller

Trunking GWTrunking GW Trunking SoftswitchTrunking Softswitch

IADIAD

Intelligent GWIntelligent GW

Suppliers partner to tightly Suppliers partner to tightly bundle the solutionbundle the solution

17

Integrated Function Savings

Softswitches and SGWs ~ 40% of loaded port cost Intelligent Gateway = Softswitch + TGW + SGW + BC

Intelligent GW saves 30-40% of loaded port cost

Component Avg. Selling Price

Softswitch/SGW $20-40/port

Border Controller $15-30/session

TGW $40-60/port

Intelligent GW $50-70

18

VoBB SP Outlook VoBB is obvious high-growth application

Residential VoBB is currently targeted by vendors Enterprise VoBB is the next growth area

VoIP market validated and attracting SPs and vendors Price-per-port will decline – equipment costs must keep up Intelligent GWs will integrate:

• TGW and Trunking Softswitch, and Signaling functions• Border Controller, Address Translation, Billing functions• Application interfacing functions• Intrusion protection, IP Security, and Management functions• Wireline-to-wireless migration

New VoBB SP entrants will look for bundled solutions Vendors must partner to provide bundled solutions to

succeed

19

Acronyms 3GPP – 3rd Generation Partnership

Project ARPU – Average Revenue Per User BB – Broadband BC – Border Controller CAGR – Compound Annual Growth

Rate CapEx – Capital Expenditure CDMA – Code Division Multiple Access CLEC – Competitive Local Exchange

Carrier DSL – Digital Subscriber Line GGSN – Gateway GPRS Support Node GPRS – General Packet Radio Service IAD – Integrated Access Device ILEC – Incumbent Local Exchange

Carrier IMS – IP Multimedia Subsystem

IP – Internet Protocol ISP – Internet Service Provider ITSP – Internet Telephony Service

Provider IXC – Interexchange Carrier MMD – Multi-Media Domain MSO – Mobile Service Operator MTA – Media Terminal Adapter OAM&P – Operations, Administration,

Maintenance, & Provisioning OpEx – Operational Expenditure OSS – Operational Support System PBX – Private Branch Exchange PDSN – Packet Data Serving Node POP – Point of Presence PSTN – Public Switched Telephone

Network

20

Acronyms RAN – Radio Access Network RBOC – Regional Bell Operating

Company RLEC – Rural Local Exchange Carrier SCP – Signaling Control Point SGSN – Serving GPRS Support Node SGW – Signaling Gateway SP – Service Provider SS7 – Signaling System 7 TGW – Trunking Gateway UMTS – Universal Mobile

Telecommunications System VNO – Virtual Network Operator VoBB – Voice over Broadband VoIP – Voice over IP

Wi-Fi – Wireless Fidelity