Softswitches: Pipe Dreams and Reality

While Class 5 deployments remain a pipe dream for most softswitch vendors, other applications showed up at Supercomm 2002 that are, not only creating a market today, however limited, but also are the Trojan horses bringing IP voice equipment through the doors of service providers so it can eventually be used to deliver true voice-over-IP call control and applications.
Internet offload has been the early success story, and large carriers are starting to dabble in IP tandem trunking for long distance.

However, a new wrinkle showed up at Supercomm, as Level 3 Communications Inc., ICG and other carriers are now exploring another application for softswitches: direct interconnects to LECs using IMTs (intermachine trunks) rather than PRIs (primary-rate interfaces).

The common denominator in these deployments is that IP voice switching is taking over tasks that used to be reserved for TDM equipment, particularly in the core of the network.
A report just issued by Insight Research Corp. says, "It is different business motivations that are driving different types of service providers to investigate softswitch technology, though all appear to have a common motivation, to lower the carriers' cost of investment and support while increasing the range of potential, profitable services they can offer."

The Insight report adds,"In the months ahead, nearly every carrier group will begin using softswitch's Internet offload and/or tandem replacement applications."

The impetus for deploying a softswitch for interconnects is immediate cost savings. If an IP voice carrier buys access to a TDM telephone network using PRIs, it will likely pay a fixed cost per DS0 for that, about $15 to $25 per month per DS0, according to figures from Level 3. That company says it is planning to offer an IP voice transit service based on interconnection at much lower rates.

"Our solution is one where we don't pay the LEC (local exchange carrier) for access, says Marcio Avillez, director, softswitch line of business, Level 3. "We have negotiated interconnect agreements with them, and we interconnect using SS7. That is possible because of our softswitch. After all, the early application for softswitches was to interface at the LEC level, so you would not to have to buy PRIs." Level 3 has created its own softswitch.

ICG Communications, a U.S. voice and data network operator just emerging from bankruptcy, has purchased a NexVerse Networks Inc. ControlSwitch to do Internet call diversion via direct control of remote access servers (RASs). This allows ICG, which has about 10 percent of the dial-up Internet market, to avoid getting PRIs from ILECs and to do direct interconnect.

In the long run, says Dharma Kuthanur, director, product marketing, NexVerse, ICG "wants to use the same platform to control other media gateways and other servers, such as voice-over-IP tandem or IP Centrex or integrated voice/data access."

Avillez says Level 3 is building its service on its managed modem infrastructure. Level 3 is one of the top three or four providers of dial-up modem services to ISPs, and the gateways used for that service can be upgraded with software to voice over IP. "We are now focused on extending our network to as much of the population as we can for our modem platform," he says, "which will become our voice-over-IP platform by the end of the year. It will reach 80 percent of the population by then."

Level 3 plans to begin with an IP origination service to support applications such as unified messaging and voice email. "It's a small niche but a large-enough opportunity that we feel we can go after it," Avillez says. "Users call on the PSTN, but the call has to be delivered to a server on the IP network." Customers would be "MSOs and large customers who are well-funded."

Despite the cost-savings that may be gained by using softswitch technology now, Rosenberg cautions, "Over the longer term, however, the carriers will have to get back to revenue creation, and that is where softswitch technology will really shine."

Kuthanur says, although carriers are buying the products today "for cost control, their eyes are not closed to the capacity of these platforms down the road. The key factor in their choice is, not just the ability to control RASs, but the ability to scale for the future."

The Insight report adds that the use of softswitches to replace Class 5 switches is "likely to have the longest gestation period" compared to other uses. "Class 5 installations are the long-term market goal of most softswitch vendors because they represent a huge market, as compared to the other applications. It is also the most difficult application, by far. This last stage may take the form of new end-office operations for new carriers, supplemental capabilities in the end offices of existing carriers or the actual replacement of thousands of the more than 23,000 existing Class 5 switches."