Many telecom network operators are facing a critical decision as to how they provide voice services going forward, especially as revenue from those services disappears. New research from Heavy Reading shows most of those preparing for the future are looking to build their own virtualized voice networks or to outsource their services to cloud-based voice providers.
That research, released in a white paper sponsored by Level 3 Communications Inc. (NYSE: LVLT) and Alianza Corp. , shows communications service providers have TDM voice switches reaching end-of-life status and even early voice over IP gear proving to be competitively inefficient. These same CSPs also view voice revenues as likely to continue a steady decline, but believe they remain an important component of a service bundle, particularly for business customers.
That sets up a dilemma: How can network operators find the most efficient means of continuing to provide voice as part of their overall service bundle, knowing it may not be a money-making proposition?
"There are several valid IP and cloud options that can be implemented," Senior Analyst Jim Hodges writes. "But there is a common, fundamental, first decision to be made: Build a network or rely on a third-party network."
There are two third-party options, Hodges notes: traditional IP-based hosted solutions and cloud voice providers, which represent a newer option.
His survey of CSPs finds the two most commonly considered options are building an NFV-based voice network (38% chose this option) or looking to a cloud voice provider (CVP), which offers a turnkey solution that is web-scale, built on virtualized software and hosted in external data centers to deliver both VoIP and unified communications (UC) services. The CVP solution was cited by 18% of respondents.
About one-fifth of the companies surveyed plan to stick with their current platform for at least the next two years, while 17% say they're most likely to deploy a non-virtualized IMS-based softswitch.
Hodges notes, however, that those advocating no-action likely don't realize the total cost of ownership of their current platforms -- i.e., what it takes to maintain and operate them. "We believe staying with the current platform will not be sustainable and this number will decline in the coming years."
The general view of voice services is changing, notes Level 3's Shawn Andrews, senior VP of IP and real-time communications. In an interview, he tells Light Reading that many of the top executives at CSPs today came up through the data ranks, and are eager to reduce the costs of delivering voice, including any specialized skill sets and all the regulatory aspects. "They would like to turn voice into the app on their network that it is for most of their customers," he notes.
When OTT players can deliver new voice features rapidly, CSPs struggle to compete using platforms that can respond in real-time, he notes.
That's a primary reason while Level 3 and Alianza sponsored the Heavy Reading research: They are hoping to demonstrate the way in which the cloud voice offering that Alianza delivers, in a partnership with Level 3, enables CSPs to have their own flexible voice platform, capable of delivering new UC features that enable them to compete.
Smaller telecom and cable operators, in particular, should be drawn to a cloud-based option, because it frees them from investing in new equipment and developing the staff skill sets it will take to run a virtualized voice service, Andrews says.
"We know a lot of large telecom operators are building their own virtual network infrastructures," he comments. "But for smaller companies, that's a challenge, not just in terms of the upfront investment but also the ongoing operations and support."
This voice services shift is likely to play out over the next few years, as the cost of maintaining the older voice solutions continues to rise.
— Carol Wilson, Editor-at-Large, Light Reading