February 1999

Reseller Hints: Servicing Your Customer's Needs

BY MARY EVSLIN

If you're a reseller of Internet telephony minutes, Marketing 101 would encourage you to spend a few minutes thinking about your customers and their needs to determine what quality call you should be purchasing. Do you sell to business customers who make sales calls? Do you sell calls to ethnic groups or college students who knowingly choose price over guaranteed high quality? Are your customers calling internationally? Each of these scenarios has different quality and pricing needs. A service that meets each group's individual needs as precisely as possible is likely to be a service that retains their business.

A provider of business calls probably needs to be dealing with a Tier 1 IP telephony carrier who leases dedicated lines or manages its own network, or with an "old-fashioned" Tier 1 PSTN provider. The calls cost more, but you know that you are purchasing the highest quality call possible today.

On the other hand, where price is more important than call quality, the provider is probably purchasing today from a Tier 3 PSTN provider and should be working with a Tier 1 or 2 IP telephony carrier. An inexpensive wholesale price helps keep the retail price lower, and quality can be compromised because customers are more forgiving. They know they are purchasing the cheapest. However, the quality still has to be sellable and dependable - increased customer support is the price you pay for going too cheap. A provider of international calls needs a Tier 1 IP telephony carrier, since the Tier 1 provider typically has a large international footprint, with over 50 IP terminating locations and a NOC (network operations center) to oversee the quality of the calls.

Let's discuss the issue of quality of calls today. The gateways and the codexes that the gateway manufacturers use have a lot to do with quality, but the biggest factor is congestion on the route that the IP packets travel.

Each IP packet is numbered. Additionally, each IP packet is free to find what it "thinks" is the best route to the termination site. That distributed process is one of the great values of IP telephony, but it is also one of the great challenges. The packets do not travel like a train - more like cars on the freeway - and therefore they do not arrive at the termination location in numeric order. Packet 5 may arrive before packet 1, and packet 11 may never arrive.

Packets traveling on a congested or small bandwidth Internet "road" are more likely to arrive out of order. This causes latency (or a ship-to-shore sound), as the packets take time to realign themselves. If a packet does not arrive within the time that the gateway decides is reasonable, the call is passed through to the called party, with packet loss resulting in missing syllables.

Packets traveling on a new, underused highway, like Qwest's, have plenty of room and arrive sequentially and fast. The quality should be "telco" strength. Your choice of gateway and of IP telephony carrier determines the quality of your calls.

KEY POINTS
Query your IP telephony carrier regarding the following issues to help you decide if they are the best provider for your needs:

• Can they allow you to listen to a call to a particular location before you purchase? Remember that congestion on the public Internet differs every hour, which affects the quality of the call. You should try it several times to get a feel for the average quality.
• Ask for sample prices for routes that you would like to purchase. If you sign an NDA (non-disclosure agreement), a carrier should be able share the prices of several routes with you. Be aware, however, that prices in the IP telephony world change regularly, as they do in the PSTN world. If you build a business plan on prices quoted last September and then begin operations in January, you will be disappointed. Rates go down and seldom go up.
• Does the carrier have customer support to help you 24 hours a day if there are problems with the route you purchased? If you begin to receive complaints from your customers about call completion or quality, you need to know where to call and that there is always someone to answer your concerns.
• Exactly how do they monitor the network and then deal with congestion? If the answer is not exact, push harder. A NOC should have software tools that allow a technician to watch the network on a real-time basis. They should be able to see outages and route around them. A NOC should be able to access real-time reports at least every half-hour that indicate call completion and duration rates. These reports should be the basis for decisions that will improve quality in a very short period of time.
• How does the carrier provide Quality of Service (QoS)? A carrier should have more than one terminating gateway in a location (redundancy), preventing a single point of failure. A carrier should also have the ability to fall back to the PSTN in times of failure - sometimes called Best Value Routing rather than strict Least Cost Routing. For an added price, a carrier can be leased a dedicated line or operate a VPN (virtual private network) on which they control the quantity of calls being routed.
• Ask exactly how many IP termination locations are currently active. Most IP telephony carriers sell some routes that have PSTN termination. When you ask where they can terminate calls, be sure that you are getting the IP termination locations if you are looking for best pricing. Be sure that the locations you are given are places where IP calls can be made today.
• How does the carrier choose termination sites? Is there any strict quality standard that a prospective terminator needs to meet? To ensure a "commercial strength network," the terminating gateways should have enough ports to handle the traffic you plan to send. They should each have at least a 256k dedicated Internet connection, to prevent congestion. They should be located as close as possible to the backbone of the Internet, to avoid latency. Remote gateways need to have 7x24 management. Ask how they are rebooted in the middle of the night if they get into trouble.
• Ask how often prices change and what increments of minutes you are charged for. Price changes more than once a month cause administrative inconveniences. A carrier should not change prices more often than monthly unless there is a special situation. Billing in 6 second increments with a 30 second minimum is standard.
• Does the carrier send calls over a VPN or the public Internet? As discussed earlier, congestion is the main cause of poor quality. If the carrier has a way to control the number of bits traveling on its network, it can guarantee the quality of the calls. However, this means that the carrier has to pay for the lines or technology and the wholesale price of the calls is higher. This issue again goes back to the quality and price your customers demand. You are the only one who knows your customers. Just be sure that you understand your options.
• Does the carrier offer PSTN to locations where they do not have IP termination? If you have a staff internally that negotiates routes for you, this is not important, but if you don't, there are probably times when you need to send calls to locations where your carrier does not have IP termination. You will simply have to tell your customers "no" if your carrier cannot purchase PSTN to fill in the voids in its IP network.
• Ask how long it takes to provision your connection. The carrier should have a team of experienced people helping to connect you to its network. Configuring your gateways or circuit-switched connections takes a professional team. Be sure the carrier you choose can provide you with the level of assistance you need.
• Does the carrier demand exclusivity? If they do, you will not be able to purchase from any other carrier who might have better routes.
• Does the carrier support gateways from more than one vendor? Do they use gateways that support closed proprietary standards or open industry standards? Has the carrier announced support for vendors whose gateways you can purchase today, or are they vapor announcements? You do not want to purchase from a manufacturer whose gateways do not interoperate with other vendors', or who cannot give you a guarantee that their gateways will interoperate within six months. Otherwise, you risk spending thousands of dollars on hardware and software that you may have to throw away.

INTEROPERABILITY
To elaborate on the final point from the above list, if you are purchasing routes from a carrier who supports a proprietary vendor, that carrier will eventually be forced to replace its entire network with industry-standard, interoperable gateways. Be sure that the carrier has the technical and financial ability to do that.

If the carrier tells you that the gateways are H.323 compatible, ask more questions. The H.323 standard is not yet completed, and each manufacturer builds to a different point in the development of the standard. The net result is that most gateways do not talk to each other. Ask how and by what date the gateway manufacturer plans to deal with that challenge.

Interoperability is essential for this industry to grow. Gateways must be able to exchange calls between gateways and gatekeepers, because no single manufacturer will sell or has sold a gateway in each major city of the world. The real industry competition is with old PSTN, and not each other. You are the customer - use your clout to make this point very clear to the gateway manufacturers.

After you receive satisfactory answers to the above questions, you will have the knowledge to go ahead and purchase rates from IP telephony carriers who offer more than just a cheap price.

Mary Evslin is the VP of marketing at ITXC Corporation. ITXC Corporation has built one of the largest affiliate networks of over 100 POPs, made up of Internet service providers, resellers, and telephone companies. It sells various services to its network affiliates. For more information, please visit their Web site at www.itxc.com.