VoIP and the Telcos - Is there a life after death?
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Transcript of VoIP and the Telcos - Is there a life after death?
VoIP and the Telcos Is there a life after death?
VON Europe 2003Industry Perspective
10. June 2003
Richard STASTNYÖFEG/TELEKOM AUSTRIA, Postbox 147, 1103-Vienna
enum:+43 664 420 4100E-Mail: [email protected]
Richard Stastny
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Content
Apocalypse now for telcos? – Problem statement
User expectations of IP based telecommunications
What a VoIP user needs and what not
Where does he get this from
What else he may need
VoIP is a product – not a service
And where is the beef?
There is life after death!
Richard Stastny
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The Problem In telephony networks
the telephony service is the core business telephony networks are vertically integrated and specialized for 64kb/sec voice and related services the intelligence is in the network
the Internet is multi-purpose and multi-media VoIP is just another application it is a “simple” transport network, the intelligence is on the
edge horizontal layering
for telcos VoIP is a disruptive technology changing the value-chain breaking up the vertically integrated networks horizontally
To survive a telco MUST change it's business model
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"First it can't possibly work, and if it did, damned if we are going to ALLOW the creation of a competitor to ourselves." (AT&T's Jack
Ostermann to Paul Baran about the Internet, quoted by Lawrence Lessig)
"If there is one thing certain about governments and innovation, it is that those who are threatened by new a innovation will turn first to the government for help. Every new idea is a threat to those who depend upon old ways of doing business."(Lawrence Lessig)
“The milk of disruptive innovations doesn't flow from cash-cows.”(David Isenberg to Lawrence Lessig)
How do telcos deal with these issues?
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This is not really new
“Innovations make enemies of all those who prospered under the old regime, and only lukewarm support is forthcoming from those who would prosper under the new. Their support is indifferent partly from fear and partly because they are generally incredulous, never really trusting new things unless they have tested them by experience.”
(Machiavelli - The Prince)
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Vertical Structure
Access
Transport
Services T
E LCO
T E LCO
T E LCO
T E LCO
NGN?
NGN?
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Horizontal Layer Unbundling
Access
Transport
Services
Internet
PSTN
ISDN
GSMUMT
S
ADSL
W-LAN
SIP MAIL IM WEB ...
...
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FUTURETODAY
The Future of the Telcos?
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Where the action is … Enterprise Toll Call
ENUM may solve the problem of cross domain or “Inter-Enterprise” call capture. So 80% or more of Enterprise calls can go all IP, leaving only 20% to the Telco.
Toll Calls are a $110 Billion revenue stream. $987 per Business line per year in toll charges (source FCC)
Intra-Enterprise Calling (40 %)
Employees atdifferent locations
Inter-Enterprise Calling (40 %)
TypicallyCustomers and Suppliers
Other (20%)
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Have we reached a tipping point?
Switched minutes are down …
… the first time since the Great Depression in the 30’s.
(Source FCC)
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User expectations of IP based Telecommunication Services
Reduce CAPEX and OPEXRe-use existing IT-Infrastructure and Internet access
Reach everybody else also on IP via IP directly Keep "already used" features and capabilities
Dial phone numbers as usual (internal and external)Reach everybody on the PSTNKeep the existing phone number (E.164)
Get new features and capabilities Instant Messaging, buddy lists, video, ... Integration in IT-Infrastructure, mobility, ...
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What does a VoIP user need ...
... to make and receive voice calls?
No phone networkNo telephony serviceNo billing system
Therefore he does not need a Telco .
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What a VoIP user needs ...
... to make and receive voice calls is:
a broadband access to the Interneta terminal (a SIP phone, a PC or a
PDA)a SIP Server (Proxy)a SIP Address (URI)phone numbers (ENUM)
In addition, he may also use these products for instant messaging, presence, video, conferencing, ....
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Where does he get this from?
the broadband access from an ISP
the terminal in a shop
the VoIP service via subscription on the Internet
the VoIP address from his domain name provider or VoIP service provider
an ENUM domain from a registrar
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What else he may need?
To make calls to the PSTN?a gateway provideran account from a VoIP service provider ora credit card assertion (e.g. from Liberty
Alliance)
To receive calls from the PSTN?an E.164 number (new or existing) from a
Registrar routing of this number on the PSTN to a gateway routing of this number on the Internet (ENUM)
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... and as an enterprise?
All of the previous mentioned items plus: a VoIP Server HW by re-using an existing PC a VoIP server SW on a CD-ROM or via download More terminals and PBX features?
install a switched LAN (if you have not already) go buy more terminals in the shop ... this is called IP PBX!
Possibility to outsource? outsource the VoIP Server ... this is called IP Centrex!
Use ENUM ... this obsoletes IP Centrex
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e.g. a Pingtel phone is a product
VoIP is a Product – not a Service
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The ZapMail Example The story of ZAPMail:
In 1984 Federal Express announced a new service called ZapMail, which guaranteed document delivery in 2 hours. They built this service not by replacing their planes with rockets, but with fax machines.
Two years and hundreds of millions of dollars later, FedEx pulled the plug on ZapMail.
The story of ZapMail's collapse holds a crucial lesson for the telephone companies today: Federal Express didn't get that faxing was a product, not a
service. Because of this, it failed to understand how the fax network
would be built - by individual customers buying one fax machine at a time.
Finally it misunderstood who its competition was: its customers.
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ZapPhone and VoIP As FedEx was about faxes, the telephone companies are in deep denial
about the change from circuit switching to IP-based voice.
Telcos developed the following strategy:
Step #1: Scrap the existing network
Step #2: Replace it with an inexpensive IP network
Step #3: "Preserve the revenue stream" by continuing to charge the same
prices
This will not work, because the customers don't need to wait for
the telephone companies to offer services based on IP. They
already have access to an IP network -- it's called the Internet !!
Two cheap consumer devices that create enormous value for the owners
while generating little revenue for the phone companies exist already:
WiFi access points, which allow the effortless sharing of broadband
connections,
and VoIP Phones and VoIP converters (e.g. the Cisco ATA).
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So what can a Telco/ISP provide?
The broadband access to the Internet Part of the backbone The gateway to the PSTN Routing of the E.164 number to this gateway ENUM Registrar and ENUM Nameserver
service VoIP server hosting (residential and IP centrex)
Domain Name hosting Circle of Trust for accounting and billing Intelligent packaging for Joe Doe users
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And where is the beef?
VoIP and video users need broadband Boosts DSL rollout - $$/month
SIP Server hosting - $/month ENUM hosting - $/month Gateway operation
Incoming calls - $/call on PSTN Outgoing calls - $/call on Internet (via assertions)
Participation in trust circles % on each transaction Certificates $/month
Sell books, info, sex and flowers (transfer premium rate services to assertions)
Move up the value chain to services and consulting
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Best Bets
% shares of the IT industry's profit, by sector
1995 2000 2005 Trend
Business consultancy 10 13 17 Services & Software 30 29 41 – Server/Storage
Hardware – Clients
18 20 12 13 9 6
Technology 29 29 24
Source: IBM
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So there is life after death!
Maybe it is not as much $$ as nowBut not "yet" the Apocalypse
The bad news isEverbody can do this
The good news isEverbody can do this
so also a telco can do it
So this may "only" be The Perfect Storm
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Live Demo of VoIP + ENUM
The following demos are shown in the Expo at the
VON Europe 2003:
ENUM Webpage http://enum.nic.at
ENUM Administration via Web-Interface
Registration of ENUM Domain Names
ENUM Subscriber Provisioning
ENUM query via Webpage, ENUM Clients, ENUM-enabled
SIP-Server
ENUM at work in the different VoIP scenarios
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ENUM Application and Provisioning
ENUM TIER 2
NS
ENUM TIER 1
NS
ENUM TIER 0
NS
Internet ENUM TIER 1 Registry
ENUM TIER 2 Register
ENUM Registrar
ENUM SUBSCRIBE
R
ENUM USER
ENUM DNS
QUERY
ENUM Application email
VoIPetc.
Communication
REGISTRATION
ENUM NAPTR
MODIFICATION
ITU TSB RIPE NCC
3.4.e164.arpa
x.x.x.x.3.4.e164.arpa
Web SERVICES
Registrynic.at
ENUM SP Telekom Austria
Web portal
ENUMDELEGATION
RTR policy
framework
VALIDATION
WHOIS
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VoIP and ENUM
PSTN/ISDN/Mobile
Telekom Austria
at43 iptel.org FWD Siemens Kapsch
Internet
e164.arpa
dns ENUMtree
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The End
Thank you for your attention