June 1, 2004

9 Min Read

By Khali Henderson

Rollouts of VoIP as a local service replacement have been accelerating over the past two quarters with announcements from service providers such as AT&T Corp., Qwest Communications International Inc., Cox Communications Inc., Level 3 Communications Inc. and a slew of CLECs and IP telephony start-ups. Accelerated time-to-market demands for VoIP are pressuring providers to make some hard choices about their billing and support systems for this new service paradigm.

“Traditionally, the lifecycle of bringing services to market has been multiple years and multiple years to scale it,” says Kent Steffen, CEO of Telution Inc., a provider of OSS solutions for the telco and cable markets.

“Voice-over-IP has really accelerated [that timeline]. I think that carriers are taking a two-part strategy - how do I get to market and how do I operationally scale.”

The challenge, he says, is that if service providers attempt to have their legacy billing and CRM systems handle VoIP, they risk missing time-tomarket objectives. On the other hand, deploying yet another point solution undermines the goal of consolidating systems for reduced cost of ownership and operational scale. “That’s the real trade-off that carriers are trying to deal with now,” Steffen says.

Complicating the decision is that most legacy back-office systems don’t provide the flexibility to launch next-generation services like VoIP, says Richard Dwyer, managing director for communications for Excelergy Corp., a billing vendor serving utilities such as energy, cable and telecom companies. “The challenge they face with voice-over-IP is the back office can’t support it from a customer management and billing perspective,” Dwyer says, explaining that most systems never were designed to accommodate multiple products, complex rate structures and transaction-based billing. “The need to be able to track and package and bill and rate and discount depending on how you mix and match [services] requires a very flexible platform in the back end.”

The extent of the problem varies by provider type. Most incumbent telcos have more than 50 back-office systems in place that they have developed over time to support unique services, explains Keith Wolters, senior director of product and industry marketing for Convergys Corp., a vendor of integrated billing, provisioning and customer-care software.

While CLECs are much newer and have had access to more sophisticated technology, some still have up to 10 different systems in place.

In contrast, cable providers “don’t have any infrastructure in place that would support the traditional telephony processing of calls, rating them and getting them on a bill,” says Brian McCann, director of solutions marketing for Portal Software Inc., a provider of billing and customer management software. Other data network service providers, such as ISPs and broadband service providers are in a similar position. Then, there are pure-play IP telephony companies; their evaluations center on the cost of ownership question common to all of the players.

“In the case of [companies] that are going to offer a softswitch solution and they are spending half a million [or] a quarter of a million for the switch, buying a billing solution that costs twice or four times the amount of the switch is not necessarily something they want to do,” says John Robb, senior account manager for LogiSense Corp., a Canada-based billing and OSS vendor serving ISPs and broadband service providers.

VoIP may ultimately force providers to move to a convergent backoffice system that incorporates elements of product management, customer management, order management and activation, and rating and billing on a single platform. “To deploy VoIP requires all the same [business processes] as it does to deploy local [TDM] services; it is that complex. So operators are finding that they need a whole business support solution,” says Convergys Wolters, pointing to one reason providers are considering whether they should deploy another point solution or finally make the move to a convergent platform. The convergent platform, he says, is one that is not bound by network or service type; it provisions and bills for an event, whatever it might be.

Many vendors are offering such platforms that can operate as a point solution, hook into legacy systems and eventually be used to support additional new and even legacy services. Convergys, for example, introduced last summer Infinys, an integrated platform managing product, customer, fulfillment and revenue (see diagram above). It is designed to augment or replace existing systems; its componentized structure enables it to be phased in as desired. “Several prospects are looking at it for VoIP,” Wolters says.

Portal Software also takes a platform approach with Infranet. “We solve the business problem first and get people to market and drive new revenue. Over time, they begin to see the value of platform and migrate more services to the platform for additional benefits in terms of bundling and to reduce the [total cost of ownership],” says McCann. Infranet, he says, provides customer management, authentication/authorization, pricing and rating, billing, payment processing, reporting. In different markets, modules support capabilities for VoIP or wireless or cable, etc. Portal Software’s VoIP manager, in particular, integrates with gateways, gatekeepers, softswitches, application servers and other IP telephony devices.

Telution also developed modules, which it calls industry kits, to manage different network topologies over its COMX platform. The company rolled out in first quarter 2004 three industry kits for VoIP: one addresses cablecos and is based on PacketCable standard, a second is for the copper- based infrastructure, and a third - a “Bring Your Own Broadband” version - is for providers like Vonage Holdings Corp. and 8X8 Inc. that are using others’ networks. “Our answer is we’ll give you a platform that scales operationally and then you plug these industry kits into it as you bring new network topologies,” says Telution’s Steffen. “It’s not [that you] need a point solution for voice over IP; it’s that [you] have an operating platform that supports multiple flavors of voice and can add data on top of that and do the bundling and billing and discounting.”

Telutions’ COMX also hooks into the legacy billing support system at the billing and provisioning points, and says Steffen, can tie into the PSTN infrastructure for telephone numbers, caller ID and E911 (see diagram below). “What we have done is build components that tie into our order management and VoIP solutions to hook into that legacy infrastructure that is outside the four walls of the carriers,” says Steffen.

Mediation vendor Intec Telecom Systems recently entered the VoIP billing market with its November 2003 acquisition of Digiquant A/S of Denmark. The company has rebranded Digiquant’s IMS product, which it now calls the Dynamic Charging Platform. Version 5.1 was rolled out in January 2004 with support for Class 4 calling card functionality. DCP includes the base modules, which performs authentication and session management and adds modules for rating, balance management and billing/CRM. Scott Mackay, vice president of IP markets - North America, says the company is in discussions with two cable companies for use of DCP to support their voice over IP rollouts. The company has many customers offering long-haul VoIP and prepaid calling services and is supporting Nobel Communications’ local VoIP offering. The company touts its integration with Intec’s flagship mediation product, InterMediate, which enables providers to move beyond voice to billing for third-party content services that will be provided over the same digital connection used for VoIP. Mackay says in the case of the RBOCs, getting into content, such as movies, is key. “The RBOCs want to extend their capabilities to include ‘cable killers,'” he says.

Excelergy’s Customer Value Manager also handles billing, customer care and revenue-cycle management. And, says Execelergy’s Dwyer, can meet the time-to-market requirement with recorded implementation times in as few as 12 weeks and typically less than 20. He says one large North American CLEC is set to deploy the platform for VoIP and other services “because the traditional [billing] solutions aren’t flexible enough [and] can’t be implemented fast enough.” The system’s object-oriented architecture is extracted from the database, hardware and presentation layers in order to provide flexibility and advantages of cost and technology gains in the market. “If you have a pressing business need, you can get at it quickly; you don’t have to wait 18 months or a year,” says Dwyer. The installation is server-based and scalable by adding additional servers. Licensed by the number of subscriber accounts, Excelergy’s software could be implemented for less than $1 million and “maybe less than half a million,” particularly since providers don’t have to pay two and three times the software cost for implementation and maintenance services. “Because of the architecture and the library, you can be as self-sufficient in managing the software as you want. … Our clients take upgrades from the FTP site and do them over the weekend, not over months,” Dwyer adds.

Cost also is a key selling point for LogiSense. Entry-level cost for the company’s Engage IP platform and required VoIP module is $50,000 to $100,000. Licenses are calculated by adding the base solution plus a per-subscriber fee. The company in March announced a major upgrade to the VoIP module targeted at the local service replacement market. The improved VoIP module includes support for local number portability, E911, 411 calling and other features as well as interoperability with major softswitches.

The combination is being used in its maiden deployment by Broadvox Direct, a subsidiary of Broadvox that provides residential and SOHO telecom services over broadband Internet connections. LogiSense’s Robb says BroadVox Direct is using EngageIP as a point solution in support of its VoIP service. He adds that while the platform can grow to support more of a provider’s services, it is an easy and cost-effective solution for entering new markets. Vendors selling leased line services for $5,000 per month and want to offer voice services on a flat-rate or per-minute basis, need a whole set of different tools, he says. “We bring that to the table,” he says.

All-in-One Answer

Switch vendors and billing companies are coming together with turnkey systems. Veraz Networks and RiverRock Systems Ltd., for example, have collaborated to supply telecom operators with an end-to-end packet telephony solution that includes customer care and billing management for VoIP. The solution features Veraz’s programmable packet telephony solution - distributed softswitch, I-Gate media gateway and third-party validation - with the RiverRock RADIX integrated billing and customer care solution.

VocalTec Communications Ltd. and EyeBill Interactive Solutions also announced the integration of EyeBill’s realtime billing platform with VocalTec’s carrier-grade VoIP architecture in support of prepaid or postpaid VoIP services. The solution enables real-time billing and balance verification, web-based self-provisioning, batch and lot management and PIN creation.


8X8 Inc. www.8×8.comAT&T Corp. www.att.comConvergys Corp. www.convergys.comCox Communications Inc. www.cox.comExcelergy Corp. www.excelergy.comIntec Telecom Systems www.intec-telecom-systems.comLevel 3 Communications www.level3.comLogiSense Corp. www.logisense.comNobel CommunicationsPortal Software Inc. www.portal.comQwest Communications International Inc. www.qwest.comTelution Inc. www.telution.comVonage Holdings Corp. www.vonage.com Sidebar Links: EyeBill Interactive Solutions www.eyebill.net.RiverRock Systems Ltd. www.riverrocksystems.com. Veraz Networks www.veraznetworks.comVocalTec Communications Ltd. www.vocaltec.com.

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