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VoIP Interconnect

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www.capacitymedia.com www.tatacommunications.com Published in association with: Published by: publishing A guide for service providers making the transition to an all-IP world VoIP Interconnect
Page 1: VoIP Interconnect


Published in association with: Published by:


A guide for service providers making the transition to an all-IP world

VoIP Interconnect

Page 2: VoIP Interconnect

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.


Rich VoIP experience

A reputation you can rely on

Page 3: VoIP Interconnect

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 RoutingTM 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

The voice of the future is here

VoIP Guide 2009 01


Page 4: VoIP Interconnect

Our VoIP advantage

Innovative and reliable solutions for today’s market


_ NGN network access without investments_ Improve scale and reach while reducing cost of non-core business_ Streamlined, best-in-class traffi c 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.


Page 5: VoIP Interconnect


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


What are the challenges of VoIP interconnection, and how can they be overcome?


How should carriers undertake the migration of TDM bilaterals to VoIP?


The NGN evolution: traditional carriers must engage with the new breed of VoIP providers


The future lies in native VoIP, so choosing the right VoIP interconnect partner is critical


Tata Communications’ global IP footprint

Contents Page


VoIP Guide 2009 03


For more information about Tata Communications please contact:

Marcelle FerlandCommunications ManagerTel: +1 514 868 7272 Fax: +1 514 868 7168Email: [email protected]


For more information about Capacity magazine© Telcap Ltd. please contact:

Tel: +44 (0) 20 8549 2449Fax: +44 (0) 20 8549 1249Email: [email protected]


Page 6: VoIP Interconnect

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

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 INTERCONNECTSMany 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 cost-

effective and quicker to roll out than TDM-based

The need to interconnect voice over IPAn all-IP infrastructure allows operators to benefit from growth in IP services, but the migration ofinterconnects from TDM to VoIP remains a key challenge

Capacity publishing

The quicker the market as a wholeadopts native VoIP interconnection,the faster all carriers can benefit from VoIP economics and serviceflexibility


Page 7: VoIP Interconnect

VoIP Guide 2009 05

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 CAPABILITIESAs 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

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 RoutingTM system, it is

one of the few international wholesale voice players

that can give its customers and suppliers direct


Source: Ovum – David James and Mark Giles, October 2008

Because of the investments Tata Communications is making in its

next-generation network (NGN) andBestValue RoutingTM system, it is one of

the few international wholesale voiceplayers that can give its customers and

suppliers direct access to each other,regardless of whether they have

VoIP or TDM interconnects


Page 8: VoIP Interconnect

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.

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

Capacity publishing06


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.


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 VoIPLinkTM product.


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

Capacity publishing

IP/MPLS-based NGNs are more flexible than TDM networks as theycan support multiple business modelssimultaneously for different types and levels of service

Page 9: VoIP Interconnect

VoIP Guide 2009 07

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 STRATEGIESThe 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.


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. ■

Page 10: VoIP Interconnect

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 CHANGEOne 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

that support them, such as network monitoring

systems, are well understood. There is considerable

organisational resistance to replacing TDM intercon-

nects, even if this means an operator translates calls

from VoIP in the core network to TDM through the

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’ VoIPLinkTM


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.

PERCEPTION OF VOIP AS A LOW QUALITY SERVICETen 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,

The challenges of VoIP interconnectionWhat are the factors holding back carrier progress towards the interchange of VoIP traffic?

Capacity publishing

Many carriers have not yet decided toinvest in a next-generation IP network,so IP is not a core competency. Theyare a long way from being able toreplace their TDM interconnects


Page 11: VoIP Interconnect

VoIP Guide 2009 09

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 RoutingTM 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 SERVICEAgain, 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


Source: Tata Communications


Page 12: VoIP Interconnect

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 sup-

ported 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 SUPPORTIP 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.

INTEROPERABILITYBy 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. ■

Capacity publishing10


Tata Communications’ BestValue RoutingTM 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 RoutingTM 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 RoutingTM 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 RoutingTM 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. ■

Capacity publishing

Page 13: VoIP Interconnect

VoIP Guide 2009 11

The migration of TDM bilaterals to VoIPThere 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 carrier-

grade 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


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

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


Page 14: VoIP Interconnect

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

VoIPLinkTM 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 SBCAn 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

Capacity publishing12 Capacity publishing

An SBC is key to the security andinteroperability of VoIP interconnects.It sits at the edge of a network as a demarcation point for security and billing


Source: Tata Communications

Page 15: VoIP Interconnect

VoIP Guide 2009 13

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 CHOICESNot 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

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. ■


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

Page 16: VoIP Interconnect

VoIP will not kill the traditional bilateral model but it is

extending the number of partners with which opera-

tors 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 house-

holds and more than a quarter of US broadband


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.

VOIP PEERING HUBSVoIP peering is the rising model for interconnection

between multiple carriers that don’t have established

relationships with one another. VoIP peering is sup-

ported 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

The NGN evolutionTraditional carriers need to engage with the new breed of VoIP providers or risk becoming uncompetitive

Capacity publishing

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



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

Page 17: VoIP Interconnect

VoIP Guide 2009 15

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,


Source: Tata Communications


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 improve-

ments, management efficiency and lower cost, so it can help others understand the business case. ■

Page 18: VoIP Interconnect

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. ■

Capacity publishing16


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 RoutingTM 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. ■

Capacity publishing

Number portability presents carrierswith a large headache. How do theykeep track of all end-customer movesand daily number changes withinpeered operators’ organisations?

Page 19: VoIP Interconnect

VoIP Guide 2009 17

Choosing a VoIP interconnect partnerIt’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 back-

grounds 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 gate-

way 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 ASKAs 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


Page 20: VoIP Interconnect

Capacity publishing18 Capacity publishing

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 RoutingTM 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

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’ portfo-

lio 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 migrat-

ing to a converged IP-based interconnect supporting

their voice, signalling and data requirements.

REASONS FOR OUTSOURCING VOIP CONNECTIVITYOver 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

Tata Communications’ knowledge and experience of VoIP interconnection is unsurpassed in the market, thanks to 12 years of engagement with the technology

Page 21: VoIP Interconnect

VoIP Guide 2009 19


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

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.


Source: Tata Communications

In order to remain cost competitivecarriers need to make significant

changes to their operational systems,requiring considerable investment for

relatively small returns

Page 22: VoIP Interconnect

Capacity publishing20

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 oper-

ational 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.

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 RoutingTM 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


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. ■

Retail operators can take advantageof Tata Communications’ extensivenetwork footprint, gaining a virtualpresence in markets round the globewithout the need to invest in PoPs


For more information about Tata Communications please contact:

Marcelle FerlandCommunications ManagerTel: +1 514 868 7272 Fax: +1 514 868 7168Email: ma[email protected] www.tatacommunications.com

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