10 I
SPONSORED STATEMENT I 11
Finding profit in the
international voice industry
Declining margins, increased competition and a move away from traditional fixed-line
voice services mean service providers are having to rethink how they protect revenue
and improve profitability.
It is no secret that businesses across the globe
have been taking a more cautious approach to spending in
voice services over the last few years. Slow recovery from the
economic crisis means many have been “sweating the assets” –
basically trying to squeeze as much value out of legacy systems
as possible.
Service providers, particularly those in the international
voice business, have been falling into that category with
increasing regularity over the last few years, as they sweat
legacy TDM and IP systems. However controlling capital
expenditure (Capex) in this way does not always help with
improving performance and overall profitability.
What’s causing this in the international voice business can be
described as a “perfect storm” of elements:
Stagnant international voice traffic
ore competition between mobile network
M
operators (MNOs) and Over The Top (OTT)
service providers
shift away from traditional fixed-line voice
A
services to mobile, text, video and social networks
Declining margins
Let’s look in a bit more detail at some of these issues.
Facebook now has around 1.2 billion active users, Twitter has
650 million active users, WhatsApp has 430 million active
users every month and it was recently revealed that there were
214 billion minutes of Skype-to-Skype calls made during
2013* (source: TeleGeography). That figure represents a 36%
increase on 2012 figures and comprehensively outpaces the
flat growth in international phone calls made via landline and
mobiles during the same period.
With plenty of other options to choose from when it comes
to communicating with people across the globe, there is much
less demand for traditional voice services.
What this means is that there is a fixed pool of revenue for
those in the international voice industry and increasing
competition for it. As a result, voice is a low-return area of
investment, but without upgrades to legacy systems, service
providers will not be able to stay in the game.
Tata Communications is one of the leaders when it comes to
profitability from voice services. In 2013 the company
registered 53 billion minutes of wholesale international voice
calls, working out to over one billion per week. The company
has 1,600 service provider relationships and its network
reaches 240 countries and territories.
How To Run a Successful Voice Business
Tata’s success has come by following three key trends. The first
of these is to improve business visibility. This means having
real-time – or as near as possible – insight into traffic volumes,
margins, credit risks, currency fluctuations and potential fraud
instances. This will help providers differentiate between what
traffic is profitable and what is not.
The second is to increase efficiency. This may seem like an
obvious thing to say, but inefficient systems take much more
looking after and increase the possibility of errors and delays, says
Michel Guyot, president of Global Voice Solutions at Tata
Communications.
“Integrating back-office tools with routing, reporting and
analytics systems leads to better results and lower overheads,”
he says.
“We’re starting to see the
commercialisation of
some of the innovations
convergence enables.”
Michel Guyot, President of Global Voice
Solutions, Tata Communications
Finally, invest for the future. “More traffic than ever is
shifting to IP-enabled endpoints, especially on mobile
networks,” explains Guyot. “We’re starting to see the
commercialisation of some of the innovations convergence
enables, starting with HD voice and voice over LTE.” To meet
these challenges and maintain profitability companies should
be ready to deliver voice services over next-gen networks and
with future-ready routing tools, Guyot says.
Guyot states following the approach laid out in these three
steps has helped Tata Communications to improve its
profitability in the international voice business.
“Our Voice Business Apps offer all of the functionality
international voice providers require, from network to routing,
to back-office tools and granular reporting systems. Many of
these apps are built on the same capabilities we use to
terminate over a billion minutes of traffic a week. Our apps
“The development
demonstrates Tata’s
ability to build on its
extensive experience.”
David James, practice leader, Ovum
model also includes help with deployment and operational
challenges from our team of over 600 voice experts,” he says.
Tata Communications’ new Voice Business Apps (VBA) is a
portfolio of hosted systems and managed services that help
providers run their voice business at peak efficiency and
improve profitability.
For example, VBA enables service providers to upgrade to IP
without any upfront capital expenditure through Tata’s
network-as-a-service offering. Traffic is routed across Tata’s IP
voice architecture and eliminates the need for legacy IP or
TDM infrastructure. To achieve this, Tata Communications
partitions a PoP locally to the service provider, whose existing
interconnects are then migrated to the PoP. Traffic can then
flow across the PoP but it is controlled by the service
provider’s routing engine.
Broadband provider Liberty Global UPC is one of 30+
customers currently benefitting from VBA. The company is
using Tata Communications’ IP voice switching platform,
which has enabled it to integrate all its existing voice networks
into a single platform. This has allowed UPC to provide a
better experience for its customers, by delivering consistent
services in each market, at higher quality levels.
‘By centralising the voice business, UPC Wholesale is now
able to offer carriers one single point of contact to do voice
business for the 10 different countries UPC Wholesale is
active in: Germany, the Netherlands, Ireland, Poland, Czech
Republic, Slovakia, Switzerland, Romania, Hungary and
Austria,” says Ritchy Drost, CFO of Liberty Global’s European
Broadband Operations.
“By offering shared resources,” says Tata Communications’
Michel Guyot, “we enable companies like Liberty Global UPC
to focus on core services and key growth segments, while
being able to reduce capital commitments to traffic
management platforms, back-office capabilities and nextgeneration IP networks.”
VBA also offers a wide range of apps that can control
Fighting Fraud
Fraud is an issue that can have far-reaching
consequences for voice service providers, from
reputational damage to regulatory and legal issues to loss
of revenue and profit. Estimates place losses to fraud at
as much as 4% of all global telecom revenues. Tata
Communications’ VBA helps services providers detect and
stop fraud through a combination of technological and
human expertise.
For example, Tata Communications offers a managed
solution for high-risk routes, monitoring traffic via nearreal-time call detail records (CDR) mining solutions that
looks for known fraud patterns, the company explained.
Commercial and technical parameters are used to detect
anomalous traffic patterns and known fraud techniques
are also tracked, while any fraudulent suppliers are
automatically removed from the system. Backing all this
up is a dedicated team who monitor and alert customers
24/7, with emphasis on weekends and holidays.
costing, pricing, billing, reporting, provisioning, quality and
fraud monitoring and routing; offering all the granular
controls needed to run a voice business at maximum
efficiency. This is all automated, which massively increases
efficiency and reduces the possibility of errors.
Reports can also be delivered to mobile devices, reaching the
people who need them when they need them. Features like
this help service providers react to issues in real-time, or as
close as possible; that is how performance and service improve.
Add to this no ongoing maintenance or upgrade costs as well
as Tata Communications’ expertise in the voice field and VBA
offers all the right elements to help a service provider maintain
revenue and improve profitability, while remaining in control
of their voice business.
Real Business Benefits
Beyond those benefits, working with a company like Tata
Communications takes the strain off service providers and
enables them to concentrate on developing and delivering
products and services that benefit their clients and show real
innovation.
The introduction of Tata Communications’ VBA will help
service providers with a way to update legacy assets without
upfront investment, according to David James, practice leader,
wholesale telecoms, Ovum.
“This development demonstrates Tata Communications’
ability to build on its extensive experience, global reach and
economies of scale in the international voice market to offer
innovative services and flexible partnering options to suit
service providers’ changing needs,” James says.
Contact
For more information please contact
[email protected]