Get Serious About VoIP, Enabling Managed

TransformationMichael AndersonTelcordia Technologies

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Get Serious About VoIP, Enabling Managed Transformation

The MarketWhy You Should CareThe ChallengesThe Enablers

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VoIP Long Distance Global Traffic and Revenue Forecast

Source: Global VoIP Market 2004, iLocus, July 2004

“Revenues in 2003-04 for VoIP service provider sector stood at an estimated $4.9 billion for international and national long distance markets. This is forecast to touch $19 billion by the year 2009.”

“By the year 2009 near about 139 billion minutes of international VoIP traffic could be generated which should represent about two-thirds of theoverall international telephone traffic.”

Traffic

Revenue

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VoIP GrowthWhy You Should Care

Long Distance Service Providers Face a Huge Challenge– Erosion of current domestic and international $145 billion market IDC, 2003

– With 1/3 of international traffic left by 2009, current $35B could shrink to $10B or less with downward price pressure

Network Equipment Providers Must Shift Focus– Revenues for VoIP equipment expected to grow from $2.1billion to $10.2

billion by 2009 - up 50% from 2003 Global VoIP Market 2004, iLocus, July 2004

OSS/BSS Suppliers Must Support New World Order – Support multiple services and offerings combinations – not a silo or

monolithic– Integrate into carriers operations, business processes and workflow – Provide extensibility to support anticipated future requirements –

workflow, service offerings

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Service Provider Business Challenges

Growing Business Revenue in a market where there is slowing subscriber growth and increasing challenges with achieving returns from new service in an increasingly competitive market

Profitability where competition is lowering ARPU in traditional voice service offerings forcing a greater business dependency on newer services with different cost structures

Risk where new service offerings are increasingly dependent on new unproven models, revenue sharing, new devices requiring new payment options, and significant investment

Debt where large network and license upgrades have been funded by borrowing with increasing repayment costs

Shareholder Value in a increasing disillusioned market, with unexpected winners and losers emerging so that shareholders are closely watching key business indicators and scrutinizing strategies

Cash to meet operational costs, service debt and improve attractiveness to the market, cash flow is critical

Cost Containment making it essential to understand, analyze, manage, and control the costs involved in all aspects of infrastructure development, service delivery and competitive marketing and billing capabilities

Service providers must offer exciting new service bundles with agility and efficiency.

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VoIP Operational Challenges

Provide effective customer self-service that enables real time adds & changes through customer portal with instantaneous network adaptation

Operate in a low-cost “getting-started” environment that can scale and facilitate flow-through

Enable rapid definition and deployment of advanced IP-based services

Efficiently manage all new touch-points introduced by new services and features

Support voice services that traverse both circuit and packet networks

Manage end-to-end QoS and SLAs across converged and multi-provider networks

Support LNP, number management, CALEA and E911 Develop techniques for mitigating security threats

Customer Care

Fulfillment

Assurance

Regulatory

Security

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Enabling Transformation with VoIP Readiness Investments

Customer Care

Fulfillment

Assurance

Regulatory

Security

VoIP Requirements

Transformational Requirements

Fund VoIP with Transformational Economics

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Why are economics important?

Positive gains are crucial as the enterprise understands more and more of the true cost of doing business over project phases, and the metrics involved.

Acquisition andImplementation

TimeDirect: Software, Hardware, Implementation, Training, Systems Integration, Configuration, Data Migration

Indirect: User Training, Administration, Overhead, Management, HVAC, Facilities, Hardware Upgrades

Cost

sPh

as

e

Maintenance Upgrade

Operations

Direct: Operations personnel, maintenance charges, IT resources, maintain procedures

Indirect: Order to cash delays, system downtime, apply fixes, planning and management,

Direct: Software upgrade fees, integration time, data migration, training fees

Indirect: Opportunity costs of IT resources, user downtime, retraining, user confusion, system downtime

Source: Return on Investment ,Thomas Pisello, Information Economics Press, New Canaan, Connecticut

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OSSs As EnablersMust Migrate to Deliver “Must Have” Efficiencies

Service Specific OSS Multi-Faceted, Multi-Service OSS

Services

Local Phone Provider

Long Distance Provider

CATV OperatorInternet Access Provider

Wireless Voice Provider

Non-Broadcast

VideoInternet Access

Local Phone

Long Distance

Wireless Voice

ServicesIncumbent Service Operators

Local Phone Provider

Long Distance Provider

CATV / HFC OperatorInternet Access Provider

Wireless Voice Provider

Non-Broadcast

VideoInternet Access

Local Phone

Long Distance

Wireless Voice

Incumbent Service Operators

Cross Marketing

Cross Marketing

Substitution, Displacement and Cross Marketing

Online

Video

Content

ADSL orSatellite

Source: TMNG

?

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Functional

Technical

Operational

Economical

Shift in Evaluation, Buying, Success CriteriaIncreased Demand for Proof Points & Shared Risks

OngoingAccountability

One Time Accountability

Table stakes to business imperatives

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Aim Small, Miss Small – Ensure ROI

Positive ROI PointBenefits Exceed Costs

RealizedAccruedReturns

$

Acquisition andImplementation

Maintenance Upgrade

Operations

Time

Pla

nned

Begin

nin

g o

f R

OI

•Predictable•Achievable•Realistic•Measurable•Fast

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Benefits of NGS OSS

Subscriber self-service; delegate management

Fast introduction of the latest services and technologies – Increase revenues by increasing addressable market, targeting new

offerings - serve businesses, youth, credit challenged – Price protection with bundled consumer and business offerings– Increase ARPU with broadband and premium services

Modular platforms with flexible business rules to support any service, any business model

Lower total cost of ownership

Automated management of multi-technology networks– Flow-through service order activation and provisioning

Manager-of-manager for network surveillance and troubleshooting

Telephone Number, IP Address Management

Customer Care

Fulfillment

Assurance

Regulatory

Security

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Managed Transformation

Fund Transformation Through Iterative Improvements

The Foundation

The Transformation

StatusQuo

InventoryCosts,

Capabilities

Foundation & PlanningROI Driven

TransformationStaged Execution

Increasing Efficiency Increasing

Product Margins

Define Needs, $$

Model

Monetize Initiatives, Prioritize

New GenSystem

Invest ROI, Execute

Execute, Drive ROI

X

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“It is not the strongest of the species who survive,

not the most intelligent, but those who are the most

adaptive to change.”Charles Darwin