Voice over IP - a threat and opportunity to mobile and fixed-line operators
Voice calls that by-pass the PSTN are clearly a threat to incumbents. If alternative operators use to deliver long-distance calls to their customers, or enterprises themselves elect to piggy-back voice on their data network, then it all adds up to lost revenue for the PSTN operator.
The people that have got the most to lose from are the slow-moving incumbents sitting on obsolete circuit-switched equipment. The VoIP attraction that can exist in the corporate space, purely on the level of having lower call charges than the incumbent can offer.
To offer PSTN-like voice services over a packet-based infrastructure, Class 5 equivalent softwsitches are required. And the plus side for softwitches is that they are a lot cheaper to purchase and maintain than the traditional Class 5 switch. "A softswitch can provide savings of up to 60 per cent on both Capex and Opex compared with a TDM Class 5 switch..
However, incumbents with legacy switches wouldn't feel an immediate cost benefit as, initially at least, they would most likely need to run Class 5 and softwitches side by side. Instead, the softswitch running--for Class 5 replacement--is mostly being done by alternative operators and Internet telephony service providers.
Softswitches are the heart of today's VOIP networks, but they have evolved since their introduction less than ten years ago and continue to evolve as carriers begin implementing IP Multimedia Subsystem (IMS) and next-generation network architectures. The original softswitches were modeled after the traditional TDM switches they were designed to replace, but over time carriers have been able to take advantage of the flexible nature of IP networks to implement distributed switching architectures. Along the way, the softswitch has morphed into a collection of components distributed across the network, or just a core call control element in the center of the network, depending on one's perspective.
It is a threat only for those carriers slow to capitalize on VoIP and NGN, believes C21 Communications, exclusive provider in the UK and Ireland of Topex NGN and Fixed to Mobile Convergence portfolio. The addressable market for NGN services alone is estimated to be in excess of €38 billion over the next five years, a report said. But carriers must respond fast to new challenges and this is where C21 Communications can help.
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