Making the case for transforming your legacy TDM voice network to IP can be a daunting task. These are just some of the things we’ve heard from network operators struggling with this.
● “It isn’t broken, so leave it alone.”
● “We’re losing lines anyway, so where’s the payback?”
● “It’s a valuable revenue stream, and I don’t want to mess with it.”
Yes, some of these are contradictory, but different network operators find themselves in different situations. And that, at heart, is a key part of the problem. There just is no one-size-fits-all business case for doing the transformation, especially if the finance guys are looking for a two-to-three-year payback. But there are elements you can blend together to make the case.
Think Beyond Voice
The most powerful tool in your kit bag will be additional revenue. This doesn’t have to come from voice alone. The service providers that are most successful in pushing through the transformation to IP are doing voice as one part of a larger bundle including services such as faster Internet or IPTV. There is an obvious synergy here too with the access gear replacement needed for such service roll-outs: the modern multi-service access node (MSAN) equipment needed for FTTH, FTTN, etc., is naturally suited to using IP (rather than TDM) for backhaul of voice traffic to the switching core. This can lay the foundations for the transformation, whether you deliver voice service by running POTS and DSL over the same copper wires, or make the leap to VoIP all the way to the premises. Crucially, by linking your transformation plans to your broadband or IPTV roll-out, you can pace your investment and pay as you go.
Another tool for your kit bag: the entrepreneurial spirit. Entrepreneurs are open-minded and they’re always looking forward.
As you look forward, realize that your business customers and potential customers are a good source of extra revenue. Traditional premises-based TDM-connected PBXes are dying out, and you have the opportunity to offer businesses a richer suite of services through IP trunking to IP-based PBXes or through hosted business voice. These customers produce a much greater average revenue per user than residential subscribers, and there is great scope for upselling them value-added services, in a market Infonetics Research expects to be worth $11 billion in 2016.
Even just within residential voice, though, the IP transition can enable additional attractive services that can reduce line loss. For example, consider how you could make the home phone number relevant again to family subscribers by offering smart handling of calls depending on who is calling and when, handing the call off to the most appropriate device, such as Dad’s smartphone or daughter’s tablet. Or consider helping seniors to live independently in their own homes by leveraging their most trusted communications device, the landline phone, without the need for lots of additional expensive and unfamiliar equipment commonly found in such offerings. With 20 million landline phones in senior (65+) households, there is a huge market to tap.
Having an IP voice core also means you can take on the OTT players at their own game, not just in the territories you already serve but anywhere with a broadband connection. The likes of Ooma and Magic Jack have attracted many customers with their value proposition – you can do it too.
More Efficient, Less Cost
Top-line growth is very important, but here’s one more thing for the kit bag: cost savings.
Legacy switches are power-hungry beasts, and their modern replacements use much less power, with some estimates putting the saving at 80-90 percent. That sounds like a lot, and it has been claimed that it’s generally possible to finance a complete network-wide switch replacement with these power savings alone. It may get close in extreme outliers where commercial power costs are unusually high and the climate requires continuous and aggressive cooling of telco gear, but in the general case, this is surely fanciful. However, the operations expense savings from reduced power consumption can be a useful second string to your business case.
Freeing up real estate helps the business case, too. As well as being power-hungry, your TDM switches occupy an enormous amount of floor space – roughly a square foot for every 50 lines. Modern IP switching and access equipment have a fraction of the footprint, enabling sites to be shrunk or even eliminated, saving on running costs and property taxes and perhaps allowing repurposing as a revenue-generating asset – former central offices can get a new lease of life as data centers, either for the service provider’s own internal use or as a hosted service.
You should also not neglect things such as interconnect costs. The regime for this is in flux, but a key point to bear in mind is that there is a vibrant, competitive market in IP interconnect and savings can be had by shifting traffic from TDM to IP.
This is all to say that network transformation is a tough problem with no easy cookie-cutter approach. But with the bold ambition to roll out new services across your network and determination to reap the benefits of cost savings, the transition to IP and a secure future for your voice network is there for the taking.
Interested in publishing a sponsored post to Telecompetitor? Contact us or call 240-450-2161.
Interested in publishing a sponsored post to Telecompetitor? Contact us or call 240-482-8131.
