Reducing Churn by Improving Voice Quality

By Rich Tehrani
The first issue of Internet Telephony (News - Alert) magazine – which was the first publication in the world focusing on IP communications – appeared in February, 1998. In all the years subsequent to this, we have seen the IP communications space explode with growth. Sure there have been ups and downs but we can safely say at this point the technology behind Internet telephony has changed the world for the better.

But this does not mean every VoIP call today sounds fantastic. There are obviously many factors which can affect the quality of a call ranging from available bandwidth to transcoding issues and the conversion from the circuit switched to the packetized world.

When you think about it, IP communications is just so much more complicated today than ever before. In the late 1990s, if you made a VoIP call from one computer to another, that was about as complicated as it got. Nowadays you have to worry about things like voice peering which can wreak havoc on call quality if you aren’t paying attention.

As interworking and transcoding in peering networks can sometimes be responsible for quality loss, I thought it made sense to speak with Todd Simpson, CEO of Ditech Networks (News - Alert), as his company is a leader in the transcoding space and also plays in the session border control market.

He started our discussion by explaining there is a lot of interest in SLA management between peering partners… People are paying more attention to peering quality and his customers use Ditech’s technology to measure the quality of each call, the network connection (packet loss, delay, jitter, etc.) and other artifacts such as noise and echo that haven’t been cleaned up.

Simpson says, “Lots of people have quality issues on their networks and they don’t know how to track them down. Our products give you the knowledge to see where quality problems are coming from, which means customers can enforce stricter SLAs.” He also says that their Voice Quality Assurance (VQA) product helps providers find network problems which can then be fixed.

I also asked about the board-level transcoding competitors and to this he responded that Ditech is confident they have the best algorithms in the industry relating to voice quality. Whenever they are tested against any other solution, their algorithms tend to win, he explains. “This is the essence of our value proposition,” he said. “Our platforms are very good as well and we would tend to compete more with a company like Tellabs (News - Alert) than board vendors.”

According to Simpson, the reason for transcoding is to trade off voice quality optimization on one network with voice quality optimization on another network. To this he added that having the algorithms sitting in the middle gives you much more flexibility in making such choices.

When queried about the International versus domestic markets Simpson explained that in developing countries there is tremendous mobile growth – such as India, Africa, etc. There is much potential for the company’s mobile products in these areas.

In the U.S. and Western Europe VoIP is accelerating and this is where Ditech sees their biggest growth potential.

I asked about how the company is going to market – either direct or through partnerships. He said the company is selling more direct today and is looking for new partnerships. He says they do interoperate with many networks but bundling products more tightly could add value for customers.

When asked if the transcoding market will grow, Simpson said yes because in peering networks it makes too much sense to have different codecs for different networks. “A single codec just doesn’t make sense!” he exclaimed.

I asked Simpson about how their Jasomi acquisition is playing out and Simpson explained the company was acquired for their signaling expertise. Ditech continues to invest in the signaling side of their products as well as media processing. Their SBC sales are typically to tier 3-4 service providers, and these are sold through channels.

From there our conversation went into churn due to voice quality, or lack thereof. The company’s research reveals that wireless and VoIP providers will lose over 26% of their subscribers due to churn with a total churn price tag in the tens of billions of dollars.

This number makes more sense when you realize that 170,000 people terminate contracts daily around the world because of poor voice quality.

With numbers this high it does seem to be a matter of time before service providers start to take subscriber churn due to poor quality more seriously. As they do so they will obviously spend more of their resources on solutions which enhance voice quality.

Responding to a question as to where Ditech Networks will be in five years, the company’s CEO answered, “we have the strongest assets in quality.” He stressed that voice will still be a killer application on these networks even if it may be monetized differently than it is today.

Simpson concluded by saying, “Ditech will be the voice quality experts for FMC, wireless and wireline.”

IMS Magazine Table of Contents