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The State Of Softswitch: Adding Value To Carrier Networks

By Anatoly Korsakov, MERA Systems


Since the early days of VoIP, softswitches have been the principal network component and the key enabler of VoIP service delivery. A regular buyers guide will give you fifty something companies that have softswitches in their product portfolio, but when you take a closer look at all those products you will find that a softswitch is indeed a very elusive term, and each vendor is implementing their own understanding of the softswitch concept.

Potential buyers as they look for a turnkey switching solution and make their choice between available vendors should realize that the softswitch is no straightforward replacement of legacy black box TDM switching gear. It is more about a system comprised of single elements, each of which adds to the overall functionality of the whole. It can be viewed, and is often arranged, as a number of logical components built around a single core. Such components can be incorporated in one hardware platform or run independently on different servers across physically distributed locations. The principal function of signaling and media control is thus supplemented by add-on yet indispensable tools, which constitute the major value of a given softswitch. These are the tools to check for if you compare softswitch products of different vendors, since they are the ones that actually make the difference. Routing tools provide smart routing of calls based on predefined criteria; border control units ensure interoperab ility of incompatible networks; signaling and media proxy provides for topology hiding and IP address concealment; billing and accounting modules are responsible for CDR generation and invoicing; and last but not least QoS management tools serve to provide constant quality of calls depending on the user needs and preferences. In terms of functionality, softswitches stand really close to session controllers. The basic difference between them actually lies in the intrinsic inability of session controllers to provide VoIP to PSTN interfacing, but this gap is easy to bridge by means of additional modules with PSTN support.

Gasping For A Second Wind: New Value From The Softswitch
Softswitches have been and remain the key enabler of VoIP wholesale switching, the driving force of the IPT industry of the past few years. However, as the industry gets invaded by an ever increasing number of players, the wholesale VoIP market becomes way too competitive to generate significant revenues. To keep above the waterline in the sea of VoIP, carriers keep looking for ways to drive down costs and create new revenue streams. And similarly, the role of softswitch evolves to provide the technology that meets new carrier demands. This is evolution in the proper sense of the term: an old solution acquires new functions to keep the lead of the todays industry and create a springboard to the converged networks of tomorrow.

Let us briefly outline the functions that a softswitch should perform as a revenue-generating tool on a carrier-grade network.

Optimize Network Management
To optimize wholesale traffic exchange, carriers need to keep their costs low and margins high. A mature softswitch delivers intelligent routing capabilities by switching between routes based on their cost to quality ratios, load, QoS, and other parameters in real time. Such routing tools can increase profit margins by as much as 30 percent, according to carriers testimonies.

Another critical feature that helps increase operational efficiency is the availability of advanced monitoring, analysis and reporting tools that enable carriers to keep the finger on the pulse of their network. These tools allow telcos to receive accurate real-time data on route performance and profitability, quickly react to the changing market conditions and take appropriate business decisions.

A powerful tool that will keep carriers costs on the low end is on-line profitability control, backed by automatic redirect to alternative routes. If a carrier works with several terminating partners to a particular destination (NY, for instance), it is highly advisable to have an automatic engine in place that will monitor profitability dynamics, distribute the calls to the routes with maximum profitability, and present real-time views to the network analysts in the form of intuitive graphs. In other words, profitability control tools ensure that the carrier is not losing money at any given moment in time.

Furthermore, integration of softswitches with billing solutions enhances carriers ability to collect data and increase marketing flexibility by means of embedded discounting and real-time invoicing systems a special value for carriers working with enterprise users.

Support A Variety Of Business Models
Along with overall cost reduction and network optimization, industry leading softswitches provide another way for carriers to survive in the competitive market environment. A truly next generation softswitch enables carriers to diversify their wholesaling models and thereby drive new revenue-generating opportunities. A popular business model today is leasing softswitch partitions to Tier 2 and Tier 3 operators that do not possess their own infrastructure. These smaller carriers use the leased softswitch capacity to resell minutes on a wholesale basis or offer VoIP services to enterprises and residential customers.

Another business case for a softswitch is offering VoIP exchange services, where customers can buy and sell minutes online from multiple operators, based on optimal price/quality ratios. Advanced routing tools play a vital role in this business model the softswitch sends calls traded on the exchange to available routes based on specified cost or quality criteria. The carrier profit is generated from the fees paid by traders for every minute of traffic coming through the exchange, the fees ranging from USD 0.0015 to USD 0.005 per minute depending on destination rates.

Softswitch Takes On New Roles
The past few months have demonstrated that the wholesale VoIP market has reached its climax and is likely to see a gradual yet constant reduction of revenues in the coming years. It is evident that the true potential and most profitable application of converged networks is in the many features and value added services delivered over IP. This is why many wholesale carriers start to add diverse value added services to their offerings.

At the same time, the boundaries between fixed and mobile networks tend to dissolve: researchers expect full-fledged fixed-mobile conversion somewhere in 20102012, meanwhile customers already benefit from the first steps in this direction. VoIP architecture will play a key role in the establishment of converged networks by supplying the missing link between the fixed and mobile domains.

Actually, softswitches are already an important part of todays FMC scenarios. For example, many mobile service providers offer cheap ILD calling to their subscribers, as they partner with VoIP carriers for long-distance termination of mobile traffic. Another popular business model for a VoIP telco is to operate as a Mobile Virtual Network Operator (MVNO) and resell services of a mobile carrier under its own brand, purchasing airtime at wholesale rates. Convergence of the wireless and wireline domains opens new and exciting ways to serve the end user, and the use of softswitches in this framework provides firm ground for development of new IP based services.

Take, for instance, this years hot spot IP Multimedia Subsystem (IMS). It is actually built around the IP technology with SIP in the core network. Whats more, it heavily relies on the softswitch technology, whose parts or functions are dispersed within the IMS architecture levels. Here are the main requirements for the softswitch to fit in the new IMS world: its components must be distributed, it must be agnostic of the underlying networks and protocols, and support standards-based interfaces with other network elements. Some of todays softswitches that comply with the above requirements are already being utilized by IMS vendors.

Despite the obvious recognition of IMS benefits, there is a long way to go before it becomes commercially deployable it is safe to estimate commercial implementation between 2007 and 2009. Carriers will continue to use softswitches to maximize the efficiency of their networks today and will definitely rely on them as the FMC surge finally hits the market tomorrow. IT

Anatoly Korsakov is vice president of Sales for MERA Systems. For more information, please visit the company online at

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