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SIP Trunking - An ISDN Voice

Replacement - AAPT White

Paper

The commercialisation of SIP Trunking, in

conjunction with the uptake of IP telephony,

Unified Communications and IP/MPLS services

are enabling

Australian businesses to achieve

both direct and indirect costsavings.

This primarily being achieved through the

benefits of a converged voice and data network,

and enabled feature rich environment, via open

standards.

* SIP Trunking - an ISDN Voice Replacement

* Benefits of SIP Trunking over ISDN Services

* Other Thought Leadership Reports

SIP Trunking - an ISDN Voice

Replacement

This paper provides an overview of the

technology, its place in the converged

environment, the reasons for adopting and the

benefits of doing so.

Technology Overview of ISDN and SIP Trunking

ISDN

ISDN (Integrated Services Digital Network) is a

set of protocols and standards that support

digital data transmission over the traditional

copper PSTN network to deliver higher quality

and digitally enabled services. The key feature

of the ISDN is that it integrates speech and data

on the same lines, adding features that were

not available in the classic telephone system.

ISDN supports 2 types of connections: Basic

Rate Interface (BRI) and Primary Rate Interface

(PRI). The ISDN BRI service offers two B

channels plus one D channel and a total

interface rate of 192kbps. ISDN PRI in Australia

provides 30 B channels plus one 64-kbps D

channel and a total interface rate of 2.048

Mbps.

Unlike the traditional analogue PSTN services,

ISDN as a digital technology has the following

technical advantages over PSTN:

* ISDN has faster call set-up capabilities

* ISDN has a guaranteed data rate (64kps for

each connection)

* ISDN is more suitable to handle different

types of services (voice, data and video) -

supports channel bonding for higher bandwidth

applications

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* As a digital technology, ISDN enables more

features for voice in combination with a PABX

system, compared with analogue telephony.

ISDN offers cost advantages over PSTN services

where organisations require multiple telephone

lines, and is a scalable voice solution for SME

and MLE organisations. ISDN in combination

with an ISDN enabled PABX system can

significantly reduce the number of lines

required, compared with a traditional analogue

PSTN equipped PABX, to service the same

number of endpoints. This, in turn, can save

significant costs.

A TYPICAL ISDN VOICE NETWORK

ARCHITECTURE

FIGURE 1 A TYPICAL ISDN VOICE NETWORK

ARCHITECTURE

SIP Trunking

Session Initiation Protocol (SIP) is a signalling

protocol used for multimedia communications.

SIP Trunking offers Australian businesses an

opportunity to significantly reduce their current

ISDN costs from their on-premise PABX, by

implementing converged

voice and data traffic over a single pipe into

the carrier network.

Typically, the Point A end of the SIP trunk is

connected to the organisations PABX. The

PABX system must have a SIP trunk interface,

which is typically a native IP interface looking

outwards from the customers telephony

system. Traditional telephony systems can also

make use of SIP Trunking through

interconnection with a front-end SIP gateway

or ISDN Access Device (IAD).

Thus, as voice traffic leaves the PABXs SIP trunk

interface, it is routed via the carriers or service

providers IP access and core network. The call

is then routed to the appropriate PSTN

gateway.

The Point B, or other end of the SIP trunk,

connects from the carriers IP network via the

appropriate PSTN gateway into the carriers

PSTN network.

Benefits of SIP Trunking over ISDN Services

SIP Trunking has many advantages over ISDN,

they include:

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* Lower cost of access The cost of the

access component of SIP Trunking is typically

significantly cheaper than the more costly ISDN

services. Typically expensive individual ISDN line

interfaces can be replaced by a single, (or

multiple redundant) IP link (via either copper or

fibre). This offers the added benefit of reducing

capex and opex, as costs for an Ethernet line is

dramatically lower than multiple ISDN lines,

while offering significantly higher scalable

bandwidth.

* Lower call rates SIP Trunking typically

offers slightly lower call rates than ISDN

services, on a case-by-case basis.

* Network convergence Convergence of

voice, data and video over a common IP

network provides economies of scope and scale

and reduced network complexity.

* Independence of Access Network SIP

Trunking is carried over IP networks, meaning

that SIP Trunking is independent of the access

network type. SIP Trunking can be carried over

copper, fibre, or indeed over wireless access

networks. Hence, SIP Trunking becomes the

preferred form of carrying voice traffic over

fibre networks. Implementation of SIP Trunking

positions a business for transition to an all fibre

access network.

* Flexibility in termination SIP Trunking

enables more cost effective least-cost routing

(LCR) and provides a far more effective and

flexible disaster recovery option, as all voice SIP

traffic can be quickly rerouted to a disaster

recovery centre; a practical impossibility with

ISDN.

* Flexibility in dimensioning SIP Trunking

services can be dimension based on average

usage rather than peak

* Scalability SIP Trunking is scalable and

granular on a per channel basis, allowing an

increase or decrease in number of lines based

on changing requirements. This can be as

simple as provisioning or prioritizing a larger

allocation of bandwidth to SIP out of the

existing Ethernet link. Provisioning additional

ISDN services, by comparison, requires change

increments of 10 channels at a time, and

typically requires new lines and line interfaces

installed.

* Enables feature-rich UC UC services can

be more efficiently delivered over SIP and can

potentially federate with suppliers and

customers communication systems andprocesses, delivering decreased business

process costs.

.

Major carriers and niche service providers in

Australia have offered ISDN for many years.

ISDN has historically provided cost effective

voice service for organisations with PABXsystems. In 2009, Telsyte estimates that there

are approximately 2 million ISDN lines in service

in Australia. Usage penetration of ISDN services

is especially high in the SME and MLE market

segment, implying that these business sectors

stand most to gain from a move to SIP Trunking.

The increased market penetration of IP

telephony systems, particularly in the MLE

market segment, has been a major reason for

the decline of ISDN. According to Telsytes

latest findings, IP telephony penetration in the

MLE market has reached 17%, underpinned by

the emergence of Unified Communications

(UC). True UC features, functionalities and cost

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savings can only be fully enabled in an IP

environment. The migration to IP telephony and

UC requires fundamental changes to the

underlying infrastructure, to enable the

convergence of voice and data over IP-based

LAN and WAN. This requires moving away from

legacy services such as ISDN to maximise

feature transparency optimally. The uptake of

real-time applications having high bandwidth

requirements is also a key driver for moving

away from ISDN.

Telsyte anticipates broader availability of SIP

Trunking services in Australia will further

contribute to the decline of ISDN in the short to

medium term. However, ISDN may continue as

a backup voice and data service for the next five

years while copper access lines remain

dominant, to provide redundancy and resilience

to the primary network.

Although SIP Trunking has been around for a

few years, the market in Australia is still verynascent. While many MLE organisations have

migrated to IP telephony, they are still in the

process of evaluating SIP Trunking for enabling

IP feature transparency outside of the LAN

environment.

Telsyte has found that only 8% of businesses,

(including both the SME and MLE segments),

with IP telephony systems in place, have

implemented or are in the process of deploying

SIP Trunking. Telsyte also notes that a number

of large organisations across the country are

either in the process of deployment, or

evaluating SIP Trunking as an ISDN replacement.

These organisations come from the following

vertical industries:

* Retail

* Pharmaceutical

* Government

* Telecommunication

* Primary

* Education

Alarmingly, 42% of business decision makers

lack knowledge about SIP Trunking, creating a

major inhibitor to uptake. Decision makers are

also unwilling to take on additional risk by being

early adopters of a nascent product offering,

without understanding the hidden collateral

issues.

Another major reason for the low adoption

intention, is that carriers have been reluctant in

the past, to market the value proposition of SIP

Trunking, due to the threat of cannibalisation of

their existing profitable ISDN revenue and

customer premise equipment (CPE) revenue

e.g. PSTN/ISDN gateways.

Telsyte believes that the adoption rate of SIPTrunking will improve, as decision makers

become better informed about the capabilities

and benefits of SIP Trunking as a business

process enabler. In addition, organisations that

are migrating to IP telephony in the future will

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evaluate the SIP Trunking proposition as

integral to the migration process.

SIP TRUNKING ADOPTION INTENTIONS IN

AUSTRALIA

Telsyte predicts that enterprises will

increasingly adopt exchanged-based SIP

Trunking as it become commercially viable in

2010, due to the significant cost benefits and

operational synergies that it can deliver.

For instance, a single WAN connection with

separate VPNs (i.e. one for voice and one for

data) will be capable of servicing an

organisations entire voice and data needs,

thereby eliminating any need for ISDN to

service the primary voice needs of the

organisation, and in so doing can achieve more

than 40% cost savings over ISDN service rental.

Telsyte estimates that SIP Trunking willgenerate $5 million in service revenue in 2009

and will reach over $150 million by the end of

2013, contributing to the decline of ISDN,

particularly as Australia moves to a

predominantly fibre based access network.

Other Thought Leadership Reports

* Australian Enterprise Telephony Market,

2008 Review & 2009-2013 Forecast, May 2009

(Publication Number: 80586)

* Australian Unified Communications &

Enterprise Telephony Usage and Directions,

2009 End-User Survey, November 2009

(Publication Number 80610)

* Cloud Computing & CommunicationServices for the Australian Mid and Large

Enterprise Market, October 2009 (Publication

Number: 80625)

* Australian Broadband and Fixed

Telecommunications Market, 2008 Review &

2009-2013 Forecast, May 2009 (Publication

Number: 80587)

* Australian Mobile Services Market, 2008

Review & 2009-2013 Forecast, April 2009

(Publication Number: 80577)

* Australian Business Mobile Usage and

Directions, 2009 End-User Survey, August 2009

(Publication Number 80609)

* Conferencing & Collaboration Technologies

in the Australian Business Market 2008, January

2009 (Publication Number: 80556)

* Comparative Analysis of Australian

Smartphones and Vendors, 3Q2008, September

2008 (Publication Number 80513)

* Australian Mobile Advertising Market

Assessment, 2008, January 2009 (Publication

Number 80560)

* Show Me The Money Australian

Consumer Mobile Multi-client Custom Study,

2008, July 2008

* Australian Enterprise Unified

Communications Multi-client Custom Study,

2008, December 2008

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