SBC to Offer Nationwide Hosted VoIP, Adds Network-Based IP VPN

SBC Communications Inc. today unveiled its first broadly available hosted VoIP offering for businesses as well as a network-based version of IP VPN.

The new, nationwide hosted VoIP business product — which effectively replaces the IP Centrex SBC has been selling over the past few years — is now available in select markets and will be available in cities nationwide by the end of 2004. The network-based IP VPN service is expected to be available in the first quarter of 2004.

SBC PremierSERV Hosted IP Communication Service (HIPCS) integrates customized applications as well as the traditional functionality of business voice-only systems, through a Web browser-based interface. Service features, based on Sylantro technology, include unified messaging, through which voice mail and e-mail can be consolidated in a single inbox, and voice mail can be forwarded like e-mail; find me-follow me, which enables employees to forward calls to a mobile phone, remote office, another extension or wherever; click to call; and conferencing.

The service will initially run over gateways in Level 3 Communications’ network, Marianne Gedeon, SBC’s director of voice data convergence, tells XCHANGE. She says SBC doesn’t consider HIPCS to be a Level 3 service that SBC is reselling, because SBC is handling the billing services, the transport piece and other management of the service. SBC’s plan is to eventually deploy its own gateway, from equipment supplier Siemens, to support HIPCS, she says.

“We’re seeing a real shift in the voice market,” says Gedeon. “Basically the market is moving more and more from traditional voice and Centrex to IP PBX or hosted solutions.. We see where the trends are going and we see that’s what the customer wants. That’s why we opted to contract with Level 3 now. The plan is to eventually phase that out and go with our own infra. But the customer won’t notice any difference [when that happens], Level 3 also uses Sylantro, so there will be no noticeable customer change.”

Tom Valovic, program director for IP telephony at research firm IDC, says SBC “has definitely been the most aggressive [RBOC] with respect to hosted voice.” IDC is predicting 2004 “will be [a] breakout year for VoIP in the enterprise, with continued deployment of IP PBX, increasing mindshare of IT and telecom departments, and more activities in hosted services. `Every market has a tipping point where you say `OK this market is real.'” Valovic indicates it looks like now is that time for business VoIP.

SBC several years ago began offering IP Centrex services, but those have been sold “on a very limited basis,” Gedeon tells XCHANGE. “We are not looking to move forward with Centrex IP, we have put that on a sales hold,” she says, explaining that those IP Centrex services had to be deployed on a central office-by-central office basis “and there is a fair capex associated with that.” Gedeon declined to quantify the customer takeup of SBC’s previous IP Centrex service, but says “it was very limited.”

HIPCS, meanwhile, will be available on a nationwide basis and is based on media gateway configuration out of a data center, which can deliver the service to an entire LATA, says Gedeon. “Customers didn’t want different solutions and vendors across the enterprise, so this better suited to our customers,” she says. Now that SBC has long-distance approval in all its in-region territories, it is able to offer a nationwide service.

HIPCS is also feature-rich, with point-and-click Web portal functionality, says Gedeon, comparing the new offering to SBC’s previous IP Centrex. Also, under PremierSERV HIPCS any SBC hosted VoIP customers are considered “on net” so any calls between those customers – whether or not they’re been one business customer or different businesses on the network – are delivered at no additional charge.

HIPCS customers can choose any combination of four different feature packages, and feature packages differ based on individual users within a customer company. A standard HIPCS plan offers calls within regional calling areas. SBC has divided states in quadrants defined by what areas businesses typically call. In this package, off-net calls are charged per minute. Basic regional plans sell for as low as $29 per station (meaning connected CPE) per month for five-year contracts, says Gedeon. A national HIPCS calling plan offers unlimited on-net and off-net calling. National plans can sell for as low as $39 per station per month.

Customers of HIPCS also require an Internet connection for the service, may have to do some LAN or WAN upgrade (SBC does an assessment on that) and a CPE investment, which can be as low as $200 per port in the case of the analog phone adapters from Sylantro. Customer premises equipment options for HIPCS also include physical IP phones from Cisco and Polycom.

As for SBC’s new network-based IP VPN service, called PremierSERV IP-VPN, that incorporates all elements needed to support IP networking, including dedicated Internet connections, needed equipment, remote access software, and service management and monitoring options.

“This is just one more network technology that lets you get the applications and different features you need based on your site’s need,” says Brett Theiss, SBC’s director of IP services. He explains that SBC expects to see a hybrid model develop, where many core customer networks initially rely on frame relay or private line services for larger locations and may bring in IP services like VPN to provide satellite offices connectivity.

SBC has been offering a CPE-based IP VPN, which it will continue to offer in addition to the new network-based option, for nearly a year. The new hosted IP VPN service, Theiss adds, is based on SBC’s MPLS network so offers quality of service and can handle “critical data.” Cisco Systems is SBC’s primary equipment vendor for the new IP VPN offer, he says, but SBC will also deliver ADTRAN or other vendor equipment based on customer need.

Although the new IP VPN and hosted VoIP services are offered separately, SBC says by combining PremierSERV HIPCS and IP-VPN customized services, businesses can realize new IT efficiencies by consolidating voice and data traffic onto a single business network. IT departments also benefit from plug-and-play functionality – moves, adds and changes can be managed instantly from any network connection, and businesses can scale up or down without calling vendors or ordering new cards.

In other IP VPN news this week, MCI announced the immediate availability of IP VPN Broadband service. MCI’s new “plug-n-play solution” is delivered to customer sites preconfigured and ready for immediate installation, allowing businesses to get remote offices and shops online quickly. MCI provides full management of each remote site and end users are up and running without additional software for their desktops, according to MCI.

To connect each location, businesses have a choice of access options including MCI’s Internet DSL Office and Solo offerings that are available in 55 major markets and provide end-to-end quality of service. Customers can also supplement MCI’s broadband footprint by providing DSL or cable connectivity to their local sites and MCI will manage the VPN equipment.