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Commercial Voice Services over IP:

Opportunities and Critical Success Factors


a white paper presented by Alepo

(512) 879-1030 sales@alepo.com http://www.alepo.com

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INTRODUCTION ................................................................................................ ................................ .. Reliability and Scalability ........................ ................................................................................................ RETAIL SERVICE ................................................................................................ PROVIDERS ....... QUALITY OF NETWORK COMPONENTS ................................................................................................ ...... ORIGNATION SERVICE PROVIDERS- CRITICAL SUCCESS FACTORS ............................ ................................ TYPICAL CONFIGURATIONS ....................... ................................................................................................ PC to PC to Phone ................................................................................................ ................................ ... Broadband Phone ................................................................................................ ................................ ..... IP Centrex/Hosted PBX ............................ ................................................................................................ .................. Call Back ................................................................................................................................ Call Shops ................ ................................................................................................................................ Calling Card ................................................................................................................................ ............. Credit Card Calling. ................................................................................................ ................................ TYPICAL TIMELINE FOR DEPLOYMENT ................................................................................................ ...... WHOLESALE ................................................................................................................................ ...... WHOLESALE PROVIDERS- CRITICAL SUCCESS FACTORS ................................................................ ......... Typical Configuration ............................ ................................................................................................ ASR and Intelligent................................................................................................ .................. Routing CONCLUSION ................................................................................................ ................................ ....

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Commercial Voice over IP Services: Opportunities and Critical Success Factors

Scope
This document was created to show various business models available in the Voice over IP market, explain through graphics and text the necessary network elements and how they interact, these models critical success factors, and Alepos solutions to these issues.

Target Audience
The anticipated audience for this document is anyone considering entering into a VoIP business, or those already in a business in any of the addressed models who are considering expanding. This paper is meant for executive-level audiences as well as technical personnel with an intermediate knowledge of VoIP technology.

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Commercial Voice over IP Services: Opportunities and Critical Success Factors

Introduction
In the modern internet telephony marketplace, there are many business models available to service providers, including retail (PC to PC to phone, broadband phone, call back, call shops, and calling cards) and wholesale/traffic exchange, both of which have common critical success factors of reliability and scalability. Alepo offers both complete turnkey solutions based on reliable Cisco elements coupled with Alepo software, as well as stand alone billing software that interoperates with leading VoIP vendors. Reliability and Scalability For any VoIP business, reliability and scalability are key factors for success. It is necessary that service providers run all the time in order to increase customer satisfaction and decrease churn, and also that their business be able to grow, so that they can quickly capitalize on new market opportunities. Alepo solutions offer reliable and scalable architecture through the use of proprietary C++ code, grid architecture, and partnerships with best -in-class networking vendors like Cisco.

Retail Service Providers


A retail service provider is one who offers any of the following services: PC to PC to phone (such as Skype), Broadband Phone (such as Vonage), Call back (such as Jajah), call shops, or calling card. Below, please find a table of necessary network elements for each of the above business models:
PC to PC SIP proxy server Yes PC to phone Yes Broadband Phone Yes Call Back No Call Shops No Calling Card No Credit card calling No

Billing Server

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Session Border Controller

Yes

Yes

Yes

Interchangeable with PSTN gateway Interchangeable with SESSION BORDER CONTROLLER Yes

Interchangeable with PSTN gateway Interchangeable with SESSION BORDER CONTROLLER Yes

Interchangeable with PSTN gateway Interchangeable with SESSION BORDER CONTROLLER Yes

Interchangeable with PSTN gateway Interchangeable with SESSION BORDER CONTROLLER Yes

PSTN gateway*

Optional

Optional

Optional

Termination Provider(s)

Yes

Yes

Yes

TFTP/HTTP Server

No

No

Yes

No

No

Yes, if IVR is Cisco

Yes, if IVR is Cisco

IVR Origination Provider (s) Partnering with E911 providers

Optional Optional No

Optional Optional No

Optional Yes Yes

Optional Optional No

Optional Optional No

Yes Optional No

Yes Optional No

Table 1- Retail Service Provider Necessary Network Elements

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Commercial Voice over IP Services: Opportunities and Critical Success Factors

If purchased as part of an Alepo solution: SIP proxy server Included

Vendors Alepo interoperates with

Billing Server

Included

Session Border Controller

Included (Cisco) -Cisco -Quintum -Nextone -Veraz Networks -VocalTec -Lucent -Alcatel -IPTel -Mailvision -Vovida -Mera -GNU Gatekeeper -SER -Asterisk

PSTN gateway*

Optional

Termination Provider(s)

Your responsibility

TFTP/HTTP Server

Included

IVR

Included

Origination Provider(s)

Your responsibility

Partnering with E911 providers

Your responsibility

Table 2- Network elements compatability with Alepo turnkey or stand alone solutions SIP proxy server- begins dialogue between callers. Recognizes end number as authentic, compares shared capabilities of customer and end user (video, audio, etc.). Initiates media line. Billing server(s)- contains all billing and customer care information. Authenticates, bills, and stores customer information. Includes vendor database, automated email reminders to customers, reporting capabilities, route management, ratings plans, customer self-care through a brandable web interface or IVRs (included in gateway), tiered administration rights for CSRs, administrators, and customers. Session border controller (SBC)- Performs multiple functions necessary for retail service providers: NAT traversal - for customers behind broadband routers. NAT-traversal allows computers on a shared network to recognize incoming calls individually. Without NAT traversal, endpoints behind broadband routers will not be able to receive calls from other endpoints behind broadband routers. Since broadband routers are used by virtually all retail users today, NAT traversal is a must-have.

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Commercial Voice over IP Services: Opportunities and Critical Success Factors

Topology hiding- allows you to hide the identity of termination providers from customers, making it difficult for competitors to learn how you operate. Protocol conversion- gives you the flexibility to switch between SIP and H.323. Since many termination providers use only H.323, it increases available termination providers. Transcoding- allows you to accept calls in codecs not supported by your termination provider (for example, you may accept calls in G729 and terminate them in G711, or vice versa). B2BUA functions- performs CDR normalization for billing and call teardown for prepaid (works with billing server to disconnect the call when credit limit is reached).

PSTN Gateway- for clients who want to terminate any calls to the PSTN (public switched telephone network). Translates the IP-based signal to one transferable over the PSTN. Useful for providers who want to be able to terminate some calls locally. For calls outside of the local area, providers will need to partner with at least one termination provider. A PSTN Gateway also allows you to accept incoming calls (for example, for a calling card business, this allows you to have an access number) and provide your customers with DIDs (direct inward dialing- allows customers to have their own phone number for accepting calls). Alternatively, you may partner with an origination provider to eliminate the need for a PSTN gateway, often resulting in a lower initial investment and higher recurring costs. * some hardware can take the role of both PSTN and a Session Border Controller, with additional modules. Partnering with termination providers- If service providers do not have a PSTN gateway, they must partner with at least one termination provider if they wish to enable their customers to call phones on the PSTN. Termination providers will provide rates for termination (often in excel spreadsheet form), which may be uploaded into Alepos system. If you have more than one termination provider for a single destination, Alepos Intelligent Routing Server will choose the most cost-effective route automatically based on relative quality and cost. TFTP/HTTP server- (for broadband phone providers) a protocol from which phones load their software and configuration. The TFTP server is necessary to remotely provision new customers phones with their user name and password upon initial use and load any changes that may be made to this information. IVR- included in most VoIP gateways. Automated telephone response system that allows customers to check or top-up balances, and communicates with users regarding allotted call time in a calling card scenario.

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Commercial Voice over IP Services: Opportunities and Critical Success Factors

Partnering with Origination/DID Providers- (like Level 3). They provide a range of numbers (DID) that you assign to your broadband phone customers so that they may be reached by other phone users. Partnering with E911 providers- for broadband phone providers, it is required by law that they provide E911 service to their subscribers. This can be done by partnering with providers such as Intrado. Can sometimes be provided by origination service providers.

Quality of Network Components


Alepo has partnered with the highest caliber companies to ensure that not only your software is reliable and scalable, but your entire system is of the highest quality in the market, all with a rapid return on investment in mind. Please contact your Alepo sales representative for attractive pricing models for the following solution (including hardware, software, installation and professional services). Network Element
SIP Proxy Server Billing Server Session Border Controller + IVR TFTP Server Voicemail Server (optional)

Sample product included in Alepo turnkey solutions


IPTel with Alepo enhancements Alepo RBS VoIP Billing Cisco Unified Border Element Alepo Provisioned TFTP server Asterisk

Table 3- Example Products included in Alepo turnkey solutions SIP Proxy Server- based on IPTel with enhancement done by Alepo. It is the most popular and scalable proxy server for retail origination service providers. Alepo Billing Server- Considered to be the most robust billing platform in the marketplace and the most reliable billing solution for voice over IP because it is written in compiled code (C++) and has been used for over ten years, making it a mature and tested product. Cisco Unified Border Element- The most reliable gateway on the market today. It supports all business models and has an excellent after market value, protecting your investment. Additionally, due to Alepos partnership with Cisco, an attractive price per port can be reached for all business sizes. Alepo Provisioned TFTP Server- Trival File Transfer Protocol on a server provided by Alepo. The standard protocol for provisioning of broadband phones. Voicemail Server (optional)- While some vendors use Asterisk also as a proxy server and session border controller for up to 50 concurrent calls, we find it most effective solely in the role of voicemail server, where it performs and scales best.

Retail Service Providers- Critical Success Factors


For any retail service provider, there are a few common critical success factors:
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Commercial Voice over IP Services: Opportunities and Critical Success Factors

offering a reliable and continuous service, buying minutes cheaper than your competitors, marketing better than your competitors, and cutting down on costs. Offering a reliable and continuous service allows you to constantly collect revenue, without losing revenue due to system failures. It also ensures high customer satisfaction, as they will always have available service. Alepo has responded to this need by creating a software solution developed from the ground-up with performance and reliability in mind, enabling five nines availability. Buying minutes cheaper than your competitors gives you a higher profit margin and the ability to offer lower, more desirable rates to your customers. Alepos Intelligent Routing capabilities allow you to simply upload buy/rate tables from wholesale providers into the system and set minimum quality and maximum cost for each of your termination points. This means that your software is automatically ensuring you profit and quality, granting you more time to shop for new termination providers with little risk. Marketing better than your competitors allows you to target key market segments and seize on opportunities. Alepos solutions include advanced reporting capabilities that allow you to monitor the system in real time, produce reports, statistics, and earning comparisons which may be exported into Quickbooks or Excel for review. Additionally, you can automatically grant free minutes based on customer usage. Intelligent routing capabilities also allow you to offer unique plans based on quality of service, so that you can market more effectively toward business and other quality-minded customers. Cutting down on costs is always an important concern with any business. Alepos solutions are designed to work in an automated manner to reduce Opex (operational expenses). Additionally, Alepo software is high performing and performs well even on entry-level hardware, reducing Capex (capital expenses), all of which allows you to focus your resources on marketing and growth.

Typical Configurations
In the following pages, each retail business model will be reviewed and typical network topology will be graphically represented. PC to PC to Phone For PC to PC to phone service providers (like Skype), PC to PC calling is typically a free service and money is made when customers dial out to the PSTN.

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Commercial Voice over IP Services: Opportunities and Critical Success Factors

Figure 1- PC to PC network topology Diagram In the diagram above, the network topology of the PC to PC portion of this business model is shown, while below one can see the topology of the PC to phone portion.

Figure 2- PC to Phone network topology diagram Broadband Phone Broadband phone providers typically make revenue by charging a monthly subscription fee, occasionally with unlimited domestic long distance (made profitable by ensuring a profit margin for average usage). Service providers may also use pre or post-paid plans with flat, tiered or usage-based billing based on duration and call number.

Figure 3- Broadband Phone network topology diagram


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Commercial Voice over IP Services: Opportunities and Critical Success Factors

IP Centrex/Hosted PBX IP Centrex is a service offered by broadband phone providers to businesses that typically includes voicemail services, DID, call transfer, call divert on no reply or busy, call waiting, conferencing, and auto attendant. Inclusion of such services in a broadband phone company allows service providers to attract small business customers that would otherwise need to purchase expensive PBX systems. IP Centrex utilizes the broadband phone infrastructure, with most features supported by the SIP Proxy server, except conferencing and auto attendant, which require programmable media gateway conferencing features. Callback A callback company is one in which the customer contacts the service provider, who then calls the destination and connects both parties. There are four ways in which the customer may contact the service provider: 1. Web callback- the customer enters his/her phone number and his/her destination number via a web interface. The system then dials both numbers and connects the call. 2. SMS callback- the customer contacts the system via SMS (text message). The system calls back the mobile phone from which the text message was sent and the IVR prompts the customer to enter the destination number. 3. Access number based- the customer is given a unique access number which is mapped to the customers phone number. The user then hangs up the phone and the system calls the customer and prompts him/her to enter the destination number. 4. ANI callback- operates much like access-number based, but without a unique access number for each user. Not reliable for international calls since not all networks are capable of processing the ANI/Caller ID.

Figure 4- Callback process diagram Since each call requires two channels at the VoIP gateway (the system must connect both user and destination), the concurrent call capacity is halved for the callback service. Call Shops Call shops are small businesses with several telephone booths available for tourists
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Commercial Voice over IP Services: Opportunities and Critical Success Factors

or customers without telephone lines to make phone calls (both local and international). Call shops make money by charging customers per-minute rates for calls. This service can be either prepaid (billed before entering the booth) or postpaid (billed after exiting the booth).

Figure 5- Call Shop network topology diagram Calling Card Calling card businesses produce cards that give customers access to the system either through an access number or over the internet. In addition to the profit made of the spread between buy rates and sell rates, profit is made when cards with unused minutes expire. In order to capitalize on this profit, your billing system must support voucher management and lifecycle or you must have a separate voucher management system.

Figure 6- Calling Card network topology diagram Calling cards could be physically printed and sold in retail stores, or they may be purchased over the web using a credit card. Some advanced billing systems also allow the purchased of calling cards using a credit card over the IVR, as described in the next example. Credit Card Calling Credit card calling takes two forms:
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Commercial Voice over IP Services: Opportunities and Critical Success Factors

1. Simply using a credit card number as if it is a calling card the credit card is authorized before the call and debited after. 2. Using a credit card to refill a prepaid account. Advanced billing systems support this function over the web and over an IVR.

Figure 7- Credit card calling network topology diagram The advantage of using credit cards as calling cards is that it cuts down on production costs by removing the need for production and distribution for this service.

Typical Timeline for Deployment


Alepos solutions are built to be quickly deployable, enabling you to be up and running in as little time as possible. Below, please find a graph of a typical timeline with necessary steps and projected timespan:

Figure 8- Typical timeline for deployment The table below outlines the list of tasks necessary for the customer and Alepo before the system can be launched.

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Commercial Voice over IP Services: Opportunities and Critical Success Factors

Customer Responsibilities

Alepo Responsibilities

Secure colocation space Contract with wholesale/termination providers and origination providers (for broadband phone) If charging via credit card, open a merchant account and payment gateway account Devise ratings plans

Ship hardware and software On-site or remote deployment and configuration Education and Training

Ongoing Support (24x7)

Table 4- Customer and Alepo responsibilities prior to launch Alepo can also recommend colocation and termination/wholesale providers as part of our consulting services.

Wholesale
A wholesale provider (such as iBasis) is a service provider who routes traffic from retail providers or other wholesale providers to termination points. The entry barrier for such a business is relatively low, and while the profit margin is lower than for a retail provider, the amount of traffic is substantially higher. Below, please find a table of necessary and optional network elements for a wholesale provider:
Wholesale Providers Billing Server Routing Server Yes Yes If purchased as part of an Alepo solution: Included Included Vendors Alepo interoperates with -Cisco -Quintum -Nextone -Veraz Networks -VocalTec -Lucent -Alcatel -IPTel -Mailvision -Vovida -Mera -GNU Gatekeeper -SER

Session Border Controller

Yes

Included (Cisco)

PSTN gateway*

Optional

Optional

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Commercial Voice over IP Services: Opportunities and Critical Success Factors

Termination Provider(s)

Yes

Your responsiblity

-Asterisk

Table 5- Wholesale service provider network elements Billing server(s)- Invoices customers, manages buy/sell rates. Communicates with Routing server for credit limit enforcement. Automates rating and invoicing of customers. Routing server- Automatically chooses routes based on preset minimum quality and maximum cost. Communicates with billing server for credit limit enforcement. Overcomes softswitch limitation of the number of routes that can be supported. Session Border Controller- Performs Topology hiding, protocol conversion, transcoding and B2BUA functions. Topology hiding- allows you to hide the identity of termination providers from customers, making it difficult for competitors (and your customers) to learn how you operate. Protocol conversion- gives you the flexibility to switch between SIP and H.323. Since most retail service providers operate in SIP, while the majority of termination providers operate in H.323, this is an essential requirement for any wholesale service provider. Transcoding- allows you to accept calls in codecs not supported by your termination provider (for example, you may accept calls in G729 and terminate them in G711, or vice versa). B2BUA functions- including CDR normalization.

Softswitch/PSTN gateway- Necessary for any wholesale provider who terminates directly to the PSTN over TDM. Partnering with termination providers- Termination providers are your suppliers, from whom you will buy minutes at wholesale. Termination providers will provide rates for termination (often in excel spreadsheet form), which may be uploaded into Alepos system. Wholesale providers may upload as many buy-rate tables as they wish, and Alepos system will automatically filter out providers whose quality or cost do not match preset standards set by you.

Wholesale Providers- Critical Success Factors


For wholesale providers, there are common critical success factors that determine their performance in the marketplace. Those include: offering a continuous and reliable service, actively shopping for new suppliers with quality routes at lower costs, marketing to other service providers, and cutting down on costs. Offering a continuous and reliable service allows you to constantly collect revenue, without losing revenue due to system failures. It also ensures high customer satisfaction, as they will always have available service. Alepo has

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responded to this need by creating a software solution developed from the ground-up with performance and reliability in mind, enabling five nines availability. Actively shopping for new suppliers with quality routes at lower costs ensures that you are constantly improving the quality and profit margin. With Alepos Intelligent Routing capabilities, selection of routes to termination points where you are partnered with more than one partner is automated based on pre-set relative quality and cost. This frees time away from management to the discovery of new, lower cost, higher quality routes, allowing you to continually increase customer satisfaction, profit, and quality of your business. Marketing to other service providers increases revenue by attracting new customers. Alepos solutions support this in three ways: 1. Allowing you the flexibility to offer different types of plans to different types of customers. With Intelligent Routing capabilities, you can ensure your customers high quality routes for their business customers and mid-quality, low cost routes for residential customers. 2. Allowing for centralized reporting capabilities. 3. Running in an automated manner, from billing to route selection and credit limit enforcement, freeing resources away from day to day management to marketing. Cutting down on costs allows you to keep prices down, increasing your customer base and keeping profits up. Automation and simplicity of route and supplier management is critical in achieving this goal by drastically reducing the cost of day to day management. Alepos Intelligent Routing server is designed to automate this process.

Typical Configuration

Figure 9- Wholesale network topology diagram ASR and Intelligent Routing ASR - Average seizure ratio - stands for the percentage of calls that actually get terminated. While ASR has many factors affecting it (such as the quality of the country circuit switched network), it is usually similar for the same destination. When a termination provider has lower then average ASR, it is typically because he oversubscribes his PSTN ports, uses low brand PSTN gateways, or does not monitor his system 24x7. Calls that do not get terminated do not get billed, making ASR an important consideration for keeping profits up.

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Commercial Voice over IP Services: Opportunities and Critical Success Factors

Figure 10- ASR and Intelligent Routing Alepos intelligent routing capabilities automatically select the termination providers in your system who fit minimum ASR and maximum cost. This frees you time to shop for new termination providers. Because intelligent routing capabilities also allow you to automatically drop providers from the system who consistently do not meet your criteria and termination providers will not be used who do not fit certain base quality ratios, you risk very little in shopping for new, low cost termination providers.

Conclusion
The modern VoIP marketplace is a dynamic environment in which a number of business models are available to aspiring service providers. It is important for any new or established business to understand their critical success factors and choose products best suited to achieve in these areas. With Alepo complete turnkey solutions or stand-alone software, providers are assured of a product that is designed to achieve these goals while remaining scalable, reliable, and high-performing.

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About Alepo:
Alepo provides software products and consulting services for customer care, billing, and OSS/BSS solutions for WiMAX deployments, Voice over IP operators, Public Wireless LAN providers, Internet service providers, IPTV, and Triple Play Providers. Founded in 1994, Alepo has emerged as a leading Operations and Business Support System for service over internet delivery providers proudly serving over 600 customers in 70 countries worldwide. Maturity, stability, and innovation position Alepo as a vital solution for both greenfield and established companies focused on scalable and reliable solutions that protect their investment, while anticipating their needs in an evolving marketplace. Some of Alepos flagship clients include: Digicel, France Telecom, Charter Communication, Fry's Electronics, TelBru, US Internet, Logan Airport, Telecom Malaysia, Indonesia Telecom, Suburban Telecom, Maxcom, Turkcell, and Superonline.

For more information about Alepo: www.alepo.com * sales@alepo.com * +1 (512) 879-1030

2007 Alepo Technologies LLC. All rights reserved.

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