Anatoly Korsakov Issue: Latin America 2006
Article no.: 18
Topic: From VoIP to EoIP
Author: Anatoly Korsakov
Title: Vice President Sales
Organisation: Mera Systems
PDF size: 208KB

About author

Anatoly Korsakov is MERA Systems’ Vice President for Sales. He oversees the company’s sales force and supervises the development of the global distribution network for MERA’s VoIP portfolio. Prior to joining MERA, Anatoly was an Account Manager and Sales Team Leader for Ericsson Russia. His previous experience also includes serving as CMO for a major regional GSM carrier in Russia. Anatoly Korsakov holds an MS in Radio Engineering.

 

Article abstract

The Voice over IP market, despite high legal and infrastructure cost entry barriers, is steadily growing in Latin America. Everything over IP, EoIP, is also growing due to increased broadband access. EoIP will carry everything from data and digitized speech to video services. Although extremely attractive, the Latin American VoIP market is difficult for small start-up operators to enter. Softswitches lets carriers attract start-up operators looking for low cost entry to become, in a sense, virtual VoIP operators.

 

Full Article

For the past two years, we have observed tremendous interest on the part of VoIP, Voice over Internet Protocol, providers in the emerging market of Latin America. This ever-increasing interest accounts for the considerable and steady market growth of VoIP. Latin America is a fertile land for VoIP, despite high entry barriers to this niche market. In the majority of Latin America countries, the VoIP market only began back in 2005, so it is still being created. This means there is still a wealth of opportunities to newcomers despite hurdles like market heterogeneity, both in terms of regulatory environment and infrastructure. The key challenges are obtaining licensing to provide VoIP services legally and dealing with the high costs of equipment maintenance. The increasing popularity of VoIP in Latin America is due to the growing availability of broadband connections, and the low cost calling it provides compared to the high long-distance rates charged by incumbent operators. It is a well-known fact that economic development and technology are closely interconnected; Latin America’s economy has shown steady growth rates that are projected to continue unabated in 2006, and then ease slightly in 2007. According to estimates by researchers, the VoIP market in Latin America should grow considerably in the coming years and reach $1.1 billion by 2011 despite challenges such as entry restrictions and low broadband penetration. The move to Everything over IP Migration to an everything over IP, EoIP, framework is fuelled by constantly growing broadband penetration. Further expansion of the use of IP technology – to carry everything from data and digitized speech to video services – brings carriers and service providers a number of extra benefits in terms of greater development capabilities and commercial opportunities and will, as well, bring innovative experiences to subscribers. Transition to EoIP brings new business opportunities and will drive additional revenue streams, but on the other hand, complicates the carrier’s network structure and management chores. Efficient operation within an EoIP framework can be achieved by deploying softswitches as core network elements and simplifying network administration tasks. Softswitches are full-fledged network management systems that enable carriers to keep their finger on the pulse of the network and control its efficiency. They serve a single point-of-entry into the carrier’s network and provide flexible proxy options to keep up critical security levels and efficiently manage bandwidth consumption. The tense competition between legacy communication service providers and VoIP carriers, and rapid technology expansion, has put a premium on the ability to offer advances in service reliability and quality of service, QoS. Insufficient QoS has little consequence for delivery of emails only – a second’s delay in an email’s arrival is hardly noticeable, but with video or audio, packet-timing failure will definitely degrade the perceived quality. Softswitches are designed to provide sufficient QoS for the real-time delivery of time-critical content. Intelligent routing capabilities enable softswitches to monitor QoS parameters across IP-networks and detect performance degradation. The ability to switch dynamically between paths with different QoS minimizes latency, enhances routing efficiency, enables creation of customer-tailored services and provides Service Level Agreement, SLA, assurance. Flexibility in providing QoS assurance adds to customer loyalty and helps to better satisfy the customers as some of them would not pay a premium for better QoS. Softswitches provide a vast choice of analytical capabilities to enable real-time monitoring of network performance and protect carriers from QoS theft – inconsistence between real and claimed QoS. Future interoperability As with any technology migration, connectivity of all types of equipment for non time-sensitive applications will be the most intricate issue on the path to EoIP. The technology itself can be inexpensive and, irrespective of the equipment carriers have already bought, softswitches will reduce up-front costs, ensure carrier-to-carrier and carrier-to-enterprise connectivity and guarantee unsurpassed technical flexibility now and in the future. Quality softswitches enable carriers to solve various interoperability issues, allow them to work in a multiple-vendor environment as well as provide secure interconnection between otherwise incompatible carrier-grade or enterprise networks, regardless of the equipment incorporated or protocols used. Customized charging The rapid growth of IP-based services offers operators and service providers new business opportunities, but also poses considerable challenges in terms of determining how to charge for the new services, and how to recover investments and maximize revenues. Migration to an EoIP framework will inevitably call for the processing of large volumes of many types of client-related data. The diversity of IP-based services requires dynamic session management, service availability control and real-time charging. So carriers and service providers will need solutions that enable them to respond flexibly and promptly to the pricing whims of partners and customers. The ability to offer customer-specific services, tailored to their payment preferences, will play a significant role in leveraging the carriers’ competitive advantages; pricing flexibility helps carriers to stay in front of their competition within a highly customer-centric framework and enhances network management efficiency. Best-of-breed Class 4 and 5 softswitches, with highly intelligent accounting capabilities, enable carriers to implement flexible discount management schemes, support various billing increments and maintain multi-currency customer and partner accounts. Innovative services As VoIP regulation lightens, more service providers will offer VoIP and the market will become more competitive. This implies the development of aggressive price competition and thin margins. To survive in such a multi-competitor environment, telcos will search for new revenue opportunities. To conquer the market and retain highly mobile customers, telcos have to create unique value for them. EoIP framework facilitates a nearly unlimited number of service innovations with universal service/media availability across subscriber devices. Subscribers can access any sort of content through any device – watch breaking news, manage bank accounts, surf the Internet, take photos and share them with friends all over the world immediately after they have been taken. New applications are limited only by the service provider’s imagination. The many value-added services delivered over IP are among the most profitable applications of converged networks. Tense competition will, sooner or later, reduce the average revenue per user, ARPU, for voice services and, as margins get thinner, telcos will more actively offer video services, even though these services are a bit less attractive due to programming expenses and costly end-user set-top boxes. To leverage their competitive advantage, carriers and service providers need reliable technologies enabling them to create new service suites quickly. Timing is crucial when introducing value-added services. Those who move quickest will be able to capture market share well before the competition fully develops, deploy their service suite, force at least some of the competitors to quit, and survive. A wide range of extra services increases ARPU and adds to customer loyalty, which is of utmost importance in a highly competitive, customer-centred environment. Today’s software-based service delivery platforms enable carriers to create new easily and cost-efficiently competitive services and reduce time-to-market. Interoperable and easy-to-upgrade, they can support an unlimited variety of applications – automated call centres, gaming, access to video and web conferencing and others. Using IP-based service platforms, carriers can also tailor customer-specific enterprise service suites. Given the increasing broadband penetration rate, video-over-IP is likely to follow the example of voice-over-IP, which was not in much demand until the quality improved and it became inexpensive and simple to deploy. Driven by better video compression technology and low-cost equipment such as media adapters, video communication services (videophone, video chat and video email) will take-off. This will, of course, create new revenue streams for the telcos. It will definitely lead to further service integration – assembling services to work together in a way that creates value for the customer – as opposed to simply packaging them for marketing purposes. New business models Carrier business opportunities are not limited to wholesale and value-added services. Carriers operating in the Latin America market can explore a comparatively new business model – softswitch partitioning. Although extremely alluring, the Latin American VoIP market is next to impossible for small start-up operators to enter. Softswitches with partitioning capabilities allow carriers to drive in new revenue streams by attracting start-up operators looking for low cost entry into the VoIP wholesale market. Softswitch owners can create multi-layer partition groups with granular access control, a variety of user privileges and web layout customization for each partition holder. IP-based communication technology will dramatically expand its footprint, bringing new valuable opportunities such as access at a distance to libraries, medical assistance, educational opportunities and others. Naturally enough, there are still many technical issues to identify and resolve before all-embracing EoIP become commercially deployable, including the leveraging of existing infrastructure and interoperability. Expansion of EoIP will depend on favourable legal regulations and on how quickly and efficiently telcos upgrade their networks to deliver higher bandwidth services.