Weathering the VoIP Storm:

Copyright © 2005 MetaSwitch, a division of Data Connection • Proprietary and Confidential • All Rights Reserved. 1

Weathering the VoIP Storm:What Every Rural Telco Needs to Know

Weathering the VoIP Storm:What Every Rural Telco Needs to Know

http://www.metaswitch.com/


What Every Rural Telco Needs to Know

Competitive forces unleashed by VoIP• Residential• Business

Implications for rural telcos

Strategies for success

Lessons from the field



VoIP Trends In Residential Subscribers

“The idea of charging for calls belongs to the last century”Niklas Zennström, CEO and Co-Founder

►November 2005: 200 Million downloads►More than 1 Million paying customers

“We’re on a steady march”Brian Roberts, CEO► Goal: 8 Million VoIP Subscribers by 2010► Hybrid wireline/cellular service via Sprint



Half of current VoIP users use it as their primary or only home phone service +

Infonetics projects 15% of cable subscribers will be on VoIP by 2007

Vonage

Net2Phone

Verizon VoiceWing

AT&T CallVantage

8x8

My Cable Co

Who are you most likely to buy VoIP service from? +

+ Source: Changewave Alliance; 1,901 respondents

Residential VoIP: Some Statistics

0

5

10

15

20

25

30

2003 2004 2005 2006 2007 2008 2009

Mill

ions

U.S. ResidentialVoIP Subscribers*

* Source: Yankee Group (August 2004),IDC (April 2005)



U.S. PBX Revenue ($M)

0

1000

2000

3000

4000

5000

6000

1999 2002 2005 2008

IP/Converged

Traditional

VoIP Trends In Business Subscribers

IP PBXs the first wave of VoIP -rapidly become mainstream

Trunks will follow lines – TDM trunk to converged SIP + data pipe (provider need not be local)

Sources: IDC, InfoTech / TIA

Rapid migration from traditional to IP Centrex and IP-PBX

IP Centrex service provider need not be local (e.g. Covad)



VoIP Implications for Independent Telcos

Continued competitive pressure• Access lines, not just minutes

Drastic reduction (even end?) of universal service fund / access charge support

Long-distance minutes go away• Most underestimate just how fast• IOCs affected, even if not directly



Three-Layered Strategy: Think BIG

Grow business with new customers out of

region

Build existing customers’ loyalty

Increase network efficiency



Build Existing Customer Loyalty

Source: Yankee Group

Business Customer Loyalty to Local Phone Provider By Market Size

“Rural operators would be well served to start now with loyalty efforts aimed at their SME customers”

VoIP Business Weekly July 11, 2005

Perc

enta

ge o

f Res

pond

ents



A Holistic View of Communications Services

Cell-phoneSim-ring with landlinePick up any messageFind-me / follow-me

PCManage phone settings

Click-to-dialOutlook contact integrationIncoming call managementTaskbar Message Indicator

SoftphonePresence / IM

PDAMobile access to emails,

voicemails, faxManage phone settings

SoftphonePresence / IM

FaxReceive where and

how I choose“Landline”

Fixed analog or nomadic VoIPAll my traditional services(residential and business)

Control which calls reach me (IP-) TVIncoming call pop-up

PBX / Key SystemSeamless off-switch calling

IP or TDM



A Holistic View of Communications Services

FaxReceive where and

how I choose“Landline”

Fixed analog or nomadic VoIPAll my traditional services(residential and business)

Control which calls reach me(IP-) TV

Incoming call pop-up

PBX / Key SystemSeamless off-switch calling

IP or TDM

!IMS is the architectural glue """"# Common service creation interfaces

# Fixed / Mobile Convergence (seamless handoff)# Innovative services to IP and traditional endpoints

PC PDACell-phone



Leverage the Power of the Web

Expectations set by online banking, shopping, …

Immediate access to• individual feature settings• business group configuration• subscription options• bills and payment history• messages (voice, email, fax)• auto attendant set-up• etc.

True “win-win”• Customer satisfaction• Reduce operator support

costs• Lower barrier to adoption of

new services• Promotional / cross-sell

opportunities



• Call History• Missed / received / dialed• Synchronized with switch• System tray message icon

• Contacts with click-to-call• Outlook integration

• Presence/IM• Messenger integration

• Live call control• Incoming call handling• Easy transfer / conference• Integrated softphone

• Phone Settings• Synchronized with switch

Bring Innovation to the Desktop



Implementation Lessons from the Field

MetaSwitch has more Class 5 VoIP deployments among US independent operators than any other softswitch vendor

#1 Lesson: A carrier-class VoIP network is not the same as an Internet-class data network• Uptime expectations of customers and ops personnel (processes!)• Reliability – redundant routes, equipment• Voice quality affected by network characteristics that data customers

might not notice (end-to-end prioritization, jitter, latency, packet loss)

Second #1 Lesson: VoIP implementations are not all the same• Different vendors interpret / implement standards differently• No substitute for field experience and proven interoperability• “IMS” is a great architectural direction, not a solution to interop issues

Finally: enjoy the ride to IP (you aren’t going to stop it!)



Conclusion

It’s about VoIP – and a whole lot moreComplete overhaul of traditional services and pricing – mindset shift for regulated telcosSee VoIP as an opportunity – not just a threat

It’s about VoIP – and a whole lot moreComplete overhaul of traditional services and pricing – mindset shift for regulated telcosSee VoIP as an opportunity – not just a threat


Weathering the VoIP Storm:

Documents