Home Latin America I 2001 Betting on the Transition to IP Telephony

Betting on the Transition to IP Telephony

by david.nunes
Luiz Augusto Castrillion de AquinoIssue:Latin America I 2001
Article no.:6
Topic:Betting on the Transition to IP Telephony
Author:Luiz Augusto Castrillion de Aquino
Organisation:Business Development of Trópico Sistemas e Telecomunicações S.A., Brazil
PDF size:20KB

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Article abstract

The 1998 privatisation of Brazil’s telephone system left in doubt the future of Trópico whose switching system, developed in Brazil, accounted for 30 percent of the Brazilian market. Instead of quitting or continuing as in the past, Trópico found partners with technology and developed systems that bridged the worlds of legacy and IP telephony. Their gamble paid off. They proved that a small local company can compete effectively with global giants.

Full Article

The payoff of the biggest gambles is linked to the inherent margin of risk. It is even a question of mathematics. These gambles are harnessed to things that are often impossible to measure, to things that are connected more to feelings and intuition than to reason. When you bet on events in the business world, you depend essentially, on a vision of what you can do to change the course of events and not merely react to them. Obviously, you need good reasons to take a risk; an executive does not put his head on the line just because of an extravagant dream. Nevertheless, the bigger the risk, the bigger the vision behind it, the greater the pleasure when the gamble is won. To bet upon a scenario that falls outside the established, stable, limits is even more exciting. This is what happened to a group of professionals in Brazil when they bet on their own abilities and competence. They managed to develop their own high-level technologies for telecommunications, ready to compete with any of the sector’s traditional multinational companies. Trópico started this way and, with the support of the Brazilian Government and its Telebrás system, developed digital telephone exchanges that provided Brazil with technological independence in the switching sector. The Trópico switches helped to drastically reduce the costs of such equipment in Brazil. When Brazil’s telephone system was privatised in 1998, Trópico, which depended upon the business generated by the government controlled Telebrás system, had to face up to the challenge of continuing in an open and free market. Privatisation was accompanied by the opening of the previously controlled market. Privatisation also brought large, global, operating companies to Brazil’s public telephony sector. These companies had their own preferred suppliers, global purchasing policies and international supply contracts. The question, then, was to continue or not. Once again, they bet on continuing – and evolving. We decided to challenge, anew, the competitive global market and take a chance on their own capacity and their own vision of the future. To keep going, they needed the best of what the global market had to offer. We needed to find international partners whose technology could keep up with the state-of-the-art. What Trópico had to offer to these partners was its knowledge of the local market and its ability to assimilate and promote relevant techno-logy as soon as it became available. This is how Trópico originated. The name was inherited from the Trópico telephone switching equipment, developed by the Telebrás system’s R&D arm, which accounted for 30 percent of the Brazilian market. Brazil, in terms of potential growth, is one of the world’s most promising telecommunications markets. Trópico counted on a product whose architecture was extremely flexible, an architecture designed to work with open packet telephony, a flexible form of packet transmission, as a path towards the convergence of voice and data networks as with, for example IP telephony. In this respect, the partnership that was negotiated with Cisco proved to be fundamental for the expansion of Trópico’s project. By combining Trópico’s hard won knowledge of local technology and systems, and its knowledge of the market’s needs, together with state-of-the-art technology to handle voice and data traffic the best of two worlds was brought together. The result of this alliance was a new high-capacity soft-switch, a software-based switching environment, able to control not only the diverse elements of an IP network but conventional telephone equipment as well. The architecture of this new soft-switch permits the efficient, uncomplicated, inclusion of advanced services as necessary. A firm vision of the future was needed in order to define the market, speaking of a technological break through that, in principle, was in competition with the TDM telephone technology that had long been the company’s chief source of income. The market had to be educated concerning the new, emerging, technology and the changes taking place in the industry’s model of telephone technology. Nevertheless, based on years of accumulated knowledge of the market and upon the technical capacity of its team, the decision was made to develop a line of equipment totally dedicated to IP telephony: access networks, call control and even a platform for intelligent services. All this was done with an eye towards compatibility with the existing “legacy” systems that Trópico knows so well. The resulting package, then, was designed to serve both as a bridge for those operating companies that had a legacy infrastructure to preserve and needed a migration path and as a ready-made package that new operators can rapidly take advantage of to initiate their services with state-of-the-art systems. A small company, at least compared to the giant global players, in a country with a comparatively modest technological tradition, introducing a new technology is challenged to prove all its claims and must often assume the uncomfortable role of a gadfly. In this case, trials – pilot operations, with a series of Brazilian operating companies, using live networks and real traffic, were organized. These trials successfully demonstrated the capacity of the system and marked a turning point in Trópico’s efforts. Despite the success, we had to hope that one or more of the industry giants would follow closely behind us in the market, if only to prove that we were not isolated believers in a path that the rest of the world might not follow. Today, two years after we entered the fray with our new idea, we look and see the competition following behind us and see this, not with fear, but as an endorsement that our beliefs were correct. What was needed to transform ourselves and our technology, and forge a new path, was the ability to innovate, to question the limits and push them back. Convergent networks are a reality today; there is no going back. In the new scenario, after the breakthrough in technology, the traditional global players no longer have the same control. At the moment, small companies with the vision and the intelligence to follow the correct path are growing explosively. It is, on the other hand, a time when giant players need the agility to modify themselves rapidly and to abandon a legacy of investment and research in traditional systems. This change of technological direction, the convergence of voice and data networks using IP telephony, will be felt by the impact the resulting new services will have upon society. Behind the automation of computerised services there is an immense range of services that will be provided that will give a human touch to man’s relationship with the machine. It is much more user-friendly to speak to a machine than to key in codes and passwords. An example of this type of application is found in the voice portals which the new, convergent, IP, networks will be able to offer. The evolution of technology now permits voice text/speech converters to provide a series of personalized services. The purchase of an airline ticket , initiated through an Internet browser, can now be continued by voice – using the original cellular or fixed Internet connection. Using voice, information can be obtained about options and prices and credit card use can be validated using voice recognition technology. The completed transaction can then be documented, or perhaps even ticketed, using the Internet browser. Conclusion Although much of the sector is betting upon the facilities that telecommun-ications bring to the individual, it is necessary to continue investing in the infrastructure that facilitates the interaction and functioning of the system as a whole. In the end, optimising the system’s resources results in better quality and lower costs, and these will both be felt by the person on the other side of the telephone line – or screen. It is this that the user looks for in addition to the best tools to integrate himself and his activities into the global community. Global community means the ability to share ideas with the four corners of the world, to be absorbed, combined with other ideas and returned to instigate further evolution. This cycle of growth can be born, with equal effect, just as easily in Manhattan as in the interior of Brazil.

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