Managing a Converged Network Will Require Interconnect Optimization

It was with much fanfare that British Telecom announced it was making a $17 billion dollar investment to replace their traditional PSTN to build what they called the “21st Century Network.” Designed to remove duplication across the carrier's existing service-specific networks, BT’s ambitious plan is to create a single converged multiservice network based on IP, which will reduce costs while providing the robust platform required to offer customers a host of next-generation products and services.

Since that announcement, more of the world’s major carriers have announced their own next-generation network construction plans, accelerating the migration of the global PSTN to an IP-centric network. Yet, before carriers can enjoy the highly touted benefits associated with next-generation networks, they first will have to operate and interconnect with hybrid IP/TDM networks which will create additional challenges including effective agreement management, optimized routing for IP/TDM networks, and the ability to quickly and efficiently bill and audit payments from multiple partners.

A More Complex Business Environment
For many carriers, the migration to next-generation networks will be more of an evolutionary process rather than an outright cutover. Leading telecom providers are deploying softswitches and building IP-centric networks in and around their exiting PSTN. As a result, carriers still will have to manage and track all their interconnect traffic, which has become even more challenging in recent years.

The promise of VoIP has resulted in the growth of a new breed of telecom carriers, many without any previous involvement in telecom services. Recently, companies such America Online Inc. and Microsoft Corp. have announced VoIP services as did eBay Inc., with its acquisition of VoIP provider, Skype Technologies S.A.

This changing telecom landscape is transforming the interconnect settlement process, which long has relied on agreements with a limited number of other telecom carriers based on long-term agreements, predictable volumes and simple per-minute pricing. Now, carriers are entering complex business agreements with multiple partners, each with a different settlement and rate plan. As a result, carriers are being forced to devote substantial resources to track and ensure that the financial obligations of each agreement are satisfied.

Another challenge created by the current interconnect structure is that carriers obtain international termination rates that are based on their vendors’ destination and dial code numbering plans. These numbering plans are typically different from the carrier’s own numbering plan and this discrepancy results in ambiguity around a carrier’s cost of termination to their interconnect partners.

Optimized Routing Will be Essential
To address the dynamic business demands associated with today’s complex interconnect agreements, carriers also will need the ability to create and implement global routing strategies in near real time. Yet for many carriers, commercial routing and technical routing long have been operated as separate organizations, each with its own business objectives.

In addition, while some of the new softswitches provide better routing capabilities and some basic LCR support, they are unable to manage the financial optimization of the network. As a result, a carrier’s ability to react quickly to financial risks and changing network conditions associated with commercial agreements is severely limited.

To address these challenges and capitalize on the reduced costs associated with IP-centric networks, many forward-thinking carriers are deploying interconnect business optimization solutions. Interconnect business optimization enables carriers to leverage more optimally their operational intelligence to manage, route, bill and audit their interconnect traffic. These pioneering solutions are able to define and manage thousands of complex interconnect agreements with other carriers and use that information to develop and implement global routing strategies.

By incorporating the cost and margin associated with each partner agreement, current network conditions and user-defined QoS benchmarks, carriers can produce optimal route suggestions at the commercial as well as the technical level. Carriers also can automate their entire global routing process so that optimized network route guides can activate routing changes directly through TDM and IP switches, on a partially or fully automated basis.

A Renewed Focus on Revenue Assurance
Interconnect business optimization solutions also provide carriers with the ability to detect and eliminate areas of potential revenue leakage. This capability will become even more essential as carriers interconnect with multiple carriers and other solution providers, each one providing a unique product or service which must be tracked and billed. By leveraging a highly flexible interconnect billing system, a carrier can eliminate revenue leakage by ensuring that every call is captured, rated and invoiced correctly, regardless of which type of network originates and terminates the call.

Combined with an end-to-end audit and dispute management system, carriers also will be able to manage effectively the countless interconnect invoices received as well as streamline the validation process, reconcile charges and manage settlements between multiple partners.

Delivering on the Promise of IP
Over the next few years, the migration away from traditional PSTN to an IP-centric network will be well under way. The lower costs, increased network efficiencies, and the ability to develop and deploy new revenue-generating services on an IP-centric network has made relying on traditional TDM technologies a losing proposition for most carriers.

Yet, the promise of reduced costs and greater operational efficiencies associated with these new networks will not be realized unless carriers also optimize their entire interconnect business. Only by deploying interconnect business optimization solutions that can manage complex business agreements and optimize the routing of traffic associated with these arrangements will carriers be able to enjoy the benefits that IP-centric networks provide.

Steve Chase is senior director of product marketing at Telarix. He can be reached at schase@telarix.com.

AOL Inc. www.aol.com
BT www.bt.com
eBay Inc. www.ebay.com
Microsoft Corp. www.microsoft.com
Telarix Inc. www.telarix.com

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