Joe AibinderDirector, AT&T VoIP Business Services

AT&T Business Services

Internet Telephony Conference Enterprise Roundtable:

State of the IndustryFebruary 6, 2003

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ArbitrageInt’l-

Domestic1999

Emerging Services and Applications

2003+Convergence

2001+

1999-– The most frequent use of VoIP has been international settlements arbitrage– As settlements and PSTN rates decrease these advantages decline

2001+– True Convergence of bandwidth

• Voice and data are allocated dynamically on access and backbone facilities• Added bandwidth becomes available due to convergence of voice and data

2003+– Emerging applications provide customers with competitive advantages

The value of VoIP is evolving from basic cost savings to leveraging convergence to enhanced value-added applications.

VoIP Industry Background - Evolution

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U.S. Office

CO or PBX

DomesticTransport

Network Interconnectsettlements

International Transport

IP Transport

IP TelephonyRouter/Gateway Local Termination

IP TelephonyGateway

CO or PBXInternationalOffice

Arbitrage-VoIP Replacement

Traditional

VoIP Evolution: Arbitrage Savings International

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Voice Savings Opportunities

Switched or

Nodal Access

Egress

1. Switched Access Cost ReductionHow?Single Access

4. Operations Simplification

How? Single Customer SPOCSingle Network -Single NOC

3. Transport Cost ReductionHow?Lower Converged Cost of VoIP

2.Switched Egress Cost ReductionHow?ArbitrageOn-Net Egress

Network

Convergence

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VoIP will be the key IP application that drives the innovation -friendly IP architectures that stimulate the creativity of developers

The core generation of new IP communications and collaborative applications will include:

IM / UM / Presence E-Contact Centers, IP-based Call Centers Virtual Meetings / Collaboration (NetMeeting) Desktop Multimedia IP Centrex in a Box Multi-Point Videoconferencing, etc.

But what’s the emerging killer application??

Emerging Applications

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Voice Over IP Marketplace Drivers• Emergence of Native IP Environments

– IP Centrex, IP PBX, IP Phones, Soft Phones, Multimedia on the LAN

– 3G Wireless, Broadband Networks

• Enterprises seeking to save money on intra-company telephone calls and faxes

• Companies want web-based call centers/web callback/e-commerce

• New IP Based Features and Services– Mobility

– Unified Messaging, Multimedia Conferencing

– Follow Me, Portals

• Technology Maturing with Open Standards for easier, faster innovation

• Converging Local, LD and Data services

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VoIP Services DevelopmentBuilding Common Infrastructures and Technologies

Enterprise OffersManaged VoIP: EVPN,

Local: IP Centrex/Virtual PBXManaged PBX

Apps/E-Contact

InternationalNext Gen. Network

Global ClearinghouseNew Hop-Off

Core NetworkIP TandemClass 4/5

Local

Broadband OffersPC Based Services

Service ProviderWireless

BroadbandWholesalers

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AT&T VoIP Offer Overview - Portfolio RoadMapFor the Enterprise, AT&T’s VoIP Portfolio is based on providing a spectrum of services of

increasing value…from basic voice services to enhanced applications .

VoIP Portfolio StackVoIP Portfolio Stack

Advanced Enterprise Services

(Switching and Routing)

Managed Data and IP

(Basic Voice Services)

Valu

eVa

lue

Enhanced

Applications

ConnectivityConnectivity Premises Premises EquipmentEquipment

ServicesServicesLocationLocation

•Broadband•MIS•Frame Relay

•ATM

•Wireless

•SOHO

•Distribution Centers•Headquarters•Branches•Satellite Sites

•Key Systems

•PBX

•IP Phones

•Soft Phones•IP PBX•ACD

•On/Off Net*

•International*

•Mgd. Voice*•Intelligent Routing•IP SDN•IP Centrex

•Unified Msg.•Instant Msg.•Electronic Contact *

•Portals•Conferencing

*Available Today

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Ethernet

13

6 8 94Source PBX

Destination(PBX, Central Office, or LAN)

Softswitch/Gatekeeper

SourceVoice/Fax

Gateway Router

DestinationVoice/Fax

Gateway Router

Router

1

2

3

5

Direction of call

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PSTN

IP Network

Ethernet

Ethernet

OSS and Ops CtrVoIP is Packetized Voice

• Real Time Transmission of Voice as Data Packets vs. Analog streams

• IP packets, Frame packets, ATM packets

• IP packets can be sent over Public Internet, Carrier VPN over CBB, or Private Data Network

Gateways compress the 64K analog channel into an electronic data packet

stream.

Softswitches/Gatekeepers provide call routing, call control

and various management functions

Source IP Phone

Source MM PC

Technology Overview - Advanced VoIP

VoIP 201VoIP call flow involves packetizing voice at the Gateway and

routing the call via the Gatekeeper.

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Growth for IP Voice Services

                                                                                                           

Industry analysts at IDC state,

“IP Telephony service revenue will grow at an annual rate of 50 percent for the next five years, increasing from $3.5 billion in 2002 to $35 billion in 2007.”

Source: IDC Worldwide Telecom Black Book, November 2002

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VoIP Service Options: AT&T’s Voice over IP Services Portfolio

Enterprise Office

PBX

DomesticTransport

International Transport

IP Transport

CO or PBX

Enterprise Officeor Hop-Off

Router

DomesticTransport

Router

Managed Frame Relay

Public Switched Network

Managed VPN Customers: Add voice to current VPN NetworkManaged Internet Services customers: Add voice to their Internet connection; Jan. 2001Managed Router Services customers: Add voice to their Frame Relay servicesManaged Data Network Services Frame Relay Offer to 40 Countries; Sept. 2001Added D-3 Speeds and extranet extensions to offers; Nov. 2001

US US

Can be US or Global

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RouterPBX

AT&T Managed IP

AT&T Frame / ATM

PSTN

MRS & MDNS

Managed Internet Services (MIS) with VoIPIP Transport with enhanced QoS plus:- 768kbps to T-3 access speeds-Global On Net, with MRS and MDNS VoIP Sites-Hop-Off to PSTN anywhere in the world

Managed Data Network Services and Managed Router Services (MDNS and MRS) with VoIPGlobal Frame Transport with QoS enhanced with-ATM transport option-Domestic access speeds up to T-3 - Hop-Off to PSTN anywhere in the world

AT&T’s VoIP Portfolio Enhancements: Spring 2002 VON AnnouncementAT&T interworks its VoIP services, leveraging its Managed IP, FR and ATM platforms

On–Net and Off-Net VoIP services extended to all AT&T’s Global VoIP Sites

MISPBX Router

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So what is really happening in the market?• IP telephony equipment vendors in pitched battle over the premises

– Cisco started it: Traditional PBX vendors now heavily in the fray– Customers new risk, “don’t want to invest in obsolete PBX ”

• Customers want to minimize risk in migrating to new IP model– HQ ITS vs. Divisional ITS; ITS manager’s job is on the line– Object of trial: Define business case and prove in solution – ITS internal trials can be first experience– Remote/greenfield sites running internal traffic - safest starting point– International sites: best economics but support can be issue– Contact center traffic is mission critical and last to put at risk

• Carriers need to reach production scale for sustainability– Key: Demonstrate quality, provisioning and customer support– Pilot is opportunity to shine so plan for security, redundancy …..

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4E Network

IP Network CBB

Local PSTN

Network

PCsPCs

ExistingCustomer

PBX

Router

Premises VoIP Gateway

IP Card

Router

IPPhone

PremisesVoIP Gateway

IP Phone

PC Phone PC Phone ClientClient

PC Phone Client

LEGACY

HYBRID

IP PBX

Current IP PBX Alternatives for Voice Services IP PBX vs. Legacy Hybrid Implementations

Key IP PBX Issues:Connectivity to LECPremises, LAN SupportProprietary PBX ImplementationsService Interworking with Network

IP PBX

IPPhoneRouter

Remote Location

TDM Phones

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4E Network

IP Network

CBB

Local PSTN

Network

VPN/Router or TA

SIPPhone

PremisesVoIP

Gateway PC Phone

Client

IP PBX

Next Evolutionary Phase:Network Based IP TelephonyVirtual IP PBX Configuration

IPPhoneRouter

Remote Branch orTeleworker

TDM Phones

Adapter

Key Virtual IP PBX focus:Application ConsistencyPremises, LAN SupportLocal, Inbound Services

NetworkHop-Off Gateway

(Optional)

IP PBXAT&T

Hosting Center

Cable or DSL

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4E Network

IP Network

CBB

Local PSTN

Network

Router

SIPPhone

PremisesVoIP

Gateway PC Phone

Client

IP Centrex

Current IP Centrex Standard Configuration Today

IPPhoneRouter

Remote LocationTDM Phones

Adapter

Key IP Centrex Issues:Premises, LAN SupportLocal, Inbound ServicesRedundancy, failure points

Call Controller with IP Centrex

NetworkHop-Off Gateway

(Optional)

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PSTNVoIP

Gateways

I NTERNET AT&T IPNetwork

VoIP Gateways

Call CenterCall

CenterCall Center

Call CenterCall

CenterCall Center

SwitchedAccess

IVR Content

Call CenterCall

CenterCall Center

VoIP SoftSwitch

Legacy CallCenters

NGN LegacyCall Centers

New GenCall Centers

Callers800

IVR / Call Center Integration Conceptwith SIP Based VoIP Services

signalingpath

signalingpath800 call

SwitchedAccess

VPN

VPN

VPN

PSTN

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VoIP - What does it take to make it work well?

VoIP works well, provided you: Have a well-managed IP network

with low packet loss, latency and latency jitter delivered through over-engineering and/or QoS

Have gateways that introduce minimal latency packetization and jitter buffer delays < 100 ms

Address interoperability between Gateways and routers Softswitches/gatekeepers and gateways Softswitches/gatekeepers (multi-domain calls) PSTN Signaling and VoIP Signaling

Have good CODECs in the gateways that delivers efficient encoding while maintaining good sound quality

Understand how to tune the gateways automatic gain control settings, echo cancellation, etc.

Understand how to hook the gateways up into COs, PBXs and international switches.

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Voice Quality Monitoring & Rating• VoIP QoS Monitoring for Network Averages (Watchdog)

– This internal tool watches the network paths between customer sites for quality.– Voice must be sampled more frequently than data to capture quality issues.– Based on “R” factor thresholds, auto-tickets are created for possible network reroutes

around congestions.• VoIP QoS Monitoring for Individual Customer Calls (NPR)

– Call rating is presented on a secure web site for customer review.– NPR customer reports will be the basis for future VoIP SLAs

• AT&T’s VoIP Service DMOQs– Latency, Jitter, Packet Loss, Call Completion, – Blocking, Availability, Post dial delay, – Time to restore and provision

• “R” factor (ITU G.107, May 2000)– Uses the ITU “R” Factor VoIP Standard– Rates calls based on latency, packet loss and jitter according to the ITU G.107 & G.114 standard.

R-factor Quality of

voice rating

MOS

90 < R < 100 Best 4.34 – 4.5

80 < R < 90

High 4.03 – 4.34

70 < R < 80

Medium 3.60 – 4.03

60 < R < 70

Low 3.10 – 3.60

50 < R < 60

Poor 2.58 – 3.10

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Comprehensive, Global, IP portfolio that includes premises support Security, Reliability and Redundancy are Critical Transparent, seamless IP services delivery with efficient interworking among networks and

technologies IP and legacy data networks (FR,ATM) Legacy and IP Telephony Premises Systems IP and PSTN Networks IP technology and protocols migration (H.323, SIP, etc.) IP Applications (VoIP, IM, Video, UM, Conferencing etc.)

Attractive economic incentives for migration to IP technologies Convergence of voice and data facilities with dynamic bandwidth Simplified network management and improved network ROI QoS and SLAs Establishing clear, manageable, migration path from the customer’s starting point to the

innovative IP applications of the future

Critical Success FactorsCritical Success Factorsfor the VoIP Services Modelfor the VoIP Services Model