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IS-3: Crossing Borders: Successful Strategies For International Expansion. Frank Estes festes@transnexus.com 770-671-1888, ext. 224. Company Overview. Founded in February 1997. Developed OSP with with major telephony vendors in 1998. Product offering in commercial service since March 2000.
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IS-3: Crossing Borders: Successful Strategies For International Expansion Frank Estes festes@transnexus.com 770-671-1888, ext. 224 Proprietary and Confidential
Company Overview • Founded in February 1997. • Developed OSP with with major telephony vendors in 1998. • Product offering in commercial service since March 2000. • Industry leader in OSP solutions. • Open solutions developer. • OSP is in use by AT&T, WorldCom, NTT, Primus, Fastconnect, and others. Proprietary and Confidential
The Constraining PSTN Today, service providers maintain two distinct and separate networks; one for delivering data traffic and another for voice traffic. Each network requires its own equipment, circuits and customer care systems. However, the declining economy and lack of capital investments budgets are causing carriers to look at core transport models and a single point of access for data, voice and other new communication mediums. Carriers are seeking to: - operate one network; - consolidate voice and data traffic; - deliver new services to their customers quickly and efficiently, and; - move the higher margin voice traffic onto the existing, lower cost IP networks Proprietary and Confidential
Today Service Provider’s Today IP Backbone PSTN Class 5 Switch Gateways Data Switch Class 4 Switch Access network Data Services Multi Service Voice Services Proprietary and Confidential
“Show Me the Money” Proprietary and Confidential
Market Challenges • Service Providers (SP’s) need to maximize geographical service coverage to enable any subscriber to reach anywhere. • SP’s need a solution which is future proof (H.323, SIP, …). • Privatization and deregulation are increasing competition and competitors. • IP Packet Networks cost significantly less to build, maintain and operate. Yet, service providers need a solution which allows future development, but does not cannibalize existing PSTN investments. • Integration of existing OSS and BSS systems into time tested and proven legacy systems. • The VoIP market in 2001 was worth 9,634 million minutes of traffic, an 81.5% increase from the previous year (source: TeleGeography, Inc., 2002). Proprietary and Confidential
Current Market • Greater than 90% of VoIP traffic uses H323 (Source NTT Comm.) • The economic advantages of packet telephony are driving both the access and core networks away from Circuit switching towards packet. Carriers are moving voice services to packet networks to reduce upfront and operational costs. A recent study found that packet voice equipment was 70% less expensive than traditional voice equipment, and data access lines were 60 to 80% less expensive than voice lines. In addition, maintenance of packet networks was 50% lower, while provisioning was in excess of 70% less (Source AT&T). • Developing solutions based on open industry standards will unite an otherwise fragmented market and allow the industry to focus on serving customer needs through better quality features and value-added services (Business Week). Proprietary and Confidential
Current Market • Voice remains the killer application, as old habits are hard to change (Usage vs. flat rate). Proprietary and Confidential
Current Market • The Telecom market is recovering from “BoIP” as the speculative amateurs are driven from the market and Telecom professional no longer fear the venture and capital funded amateurs. The Telecom companies are investing in proven technology that compliments, not revolutionizes their current infrastructure and back office systems. Proprietary and Confidential
A Market Solution! What do Service Providers need in order to meet today’s market requirements? An open, secure, scalable IP inter-connection solution which can be easily integrated with the existing PSTN network, network expansion plans, and proven external provisioning and billing systems. "Our VOIP strategy using OSP has enabled us to expand our global network coverage while minimizing the investments required in international fiber optic cable facilities, circuit switches, and other costly network equipment associated with the expansion of a traditional circuit switched network." John Melick, President, Primus Telecommunications, November 6, 2001. Proprietary and Confidential
A Market Solution! On October 10, 2002, NTT Worldwide Telecommunications Corporation (NTT-WT), a wholly owned subsidiary of NTT Communications Corporation (NTT Com) will launch a multi-protocol/multi-vendor compatible VoIP service for interconnection among carriers/Internet Telephony Service Providers (ITSPs) that use different types of protocols and VoIP equipment. The global VoIP market has been growing rapidly and it is expected that IP telephony will become the next generation network (NGN). However, difficulties in interconnection among different VoIP protocols and vendor equipment have been a major obstacle in the service development of VoIP. NTT Communications Clearinghouse (NTT-CH), provided by NTT-WT, will offer a new VoIP clearinghouse service eliminating this barrier ….. TOKYO, JAPAN –– On October 10, 2002, NTT Communications Press Release Proprietary and Confidential
The New Public Network OFF NET DATA PUBLIC INTERNET PSTN C U S T O M E R S POP POP POP POP DSL ON -NET High Speed, Optical Core POP POP POP POP ATM OFF NET VOICE Cable Open Standard Exchange Mechanism VOICEPartner POP = POP or CO Proprietary and Confidential
An Example of International Expansion Proprietary and Confidential
Case Study, VoIP Expansion Value Proposition Circuit Switched Network - Capital Investment (HIGH) - Interconnection Cost (bandwidth) (High) - Separate Voice and Data Networks Open Standard VoIP Network - Capital Investment (Low) - Interconnection Costs (bandwidth) (Low) - Digital Security - One Network - Multi-protocol and open Proprietary and Confidential
By the Numbers Proprietary and Confidential
By the Numbers (continued) Proprietary and Confidential
Case Study: Live Network Implementation Global Clearinghouse OSP GCH Settlement Server Back - end Systems (6) CDR (3) Call Routing/ Authorization AAA Retail AAA request & response (6) CDR (6) CDR (6) CDR (6) CDR (2) Authentication (4) H.323 Call Connection (5) (1) Gateway/Gatekeeper Gateway/Gatekeeper (Member A – Call Origination) (Member B – Call Termination) Proprietary and Confidential
TransNexus Information Thank you, Merci Beaucoup, Danke, Danku, Gracias Frank Estes Vice President TransNexus, Inc. 678-358-5251 (cellular and office) Festes@transnexus.com Proprietary and Confidential