What Network Transformation Means in 2020

Voice calls remain, for the foreseeable future, one of the primary methods of communicating person-to-person.
Contrast this with the 20th-century world of the PSTN and one can see that’s not how it worked. PSTN networks and their associated infrastructure were purpose-built and designed to support voice traffic only. That specialization meant they were great at performing this task, but incapable and inefficient at performing non-voice tasks. In fact, the Signal System Seven (SS7) network was designed to improve the efficiency of voice networks but, because the package was data and not voice, engineers had to design and build a separate network so that the data packages could traverse it. This investment required hundreds of millions of dollars by carriers over the years. Some of the old-time PSTN voice engineers will tell you that the PSTN network of the 20th century was one of the most over-engineered capabilities ever built. It did its primary job exceptionally well, but without any consideration of cost, efficiency, or future use.

IP/VoIP eliminates all of that complexity, sophistication, specialization and, of course, cost. IP/VoIP allows carriers to operate their networks in a way that is significantly easier and cheaper than the voice networks of the 20th century. And, in a commoditized, highly competitive industry where scale and reliability were going to become the attributes of success, easier and cheaper are equivalent to “manna from heaven” for telecommunications carriers.

Embracing IP/VoIP technologies

That brings us to today, where the world has clearly embraced IP/VoIP technologies. Carriers that haven’t yet made these investments and sunset their PSTN infrastructure are facing external and internal challenges that may prove to be insurmountable without massive investments.

But what about tomorrow and beyond? What does the future of network transformation look like?  What are the benefits carriers are seeking to realize from their initial investments in IP/VOIP, and what are some of the additional investments they need to make to continue to exploit the benefits that IP/VoIP? 

Actually, it’s exciting what the next phase of this IP/VoIP revolution will provide to the industry.  While the initial benefits of switching to an IP/VoIP-based infrastructure are easily calculated (cost reduction, efficiency, etc.), the real return on these investments are going to be realized in the next decade and will be enormous by comparison to the initial returns. Think of WhatsApp, Skype, or all the other voice messaging apps. Think of how easy it is to port your number from AT&T to Verizon. That’s all possible because of the IP network and how telecommunication companies have been able to exploit the inherent capabilities of this all-purpose, data-based network.

Interconnect Voice Management

One area of real value that is starting to be exploited with massive benefits is the interconnect voice management portion of a voice carrier’s operations. This insular world is not known to many individuals outside of voice telecommunications. It’s a complicated, critical aspect of every company that provides voice communication services. Whether you are Verizon, BT, Vodafone, Vonage, Twilio, Facebook, or Google, if you offer voice services to your customers you must have a system (or systems) to manage the hand-off/receipt of voice calls between carriers, because no carrier is connected to every landline, IP address, mobile phone or messaging application. As a result, carriers interconnect with each other and hand off calls to each other in real-time so that callers can be connected. This is the world of interconnect voice and it is a highly commoditized, hyper-competitive, dynamic, and complex component of the telecommunications industry.

Because of the invention and adoption of IP/VoIP technologies, the world of interconnect voice has undergone massive change and disruption. The cost of voice calling has plummeted around the world in every country. Today in the US, carriers can pay each other as low as $0.0005 per minute for each phone call. This is why carriers can offer unlimited voice calling plans.  The costs for voice calling have dropped to a point where they are almost free—almost. Actually, as it turns out, people in aggregate still make a lot of phone calls and spend significant time talking. In fact, voice calling—often referred to as voice traffic in the industry—has stabilized over the last few years. Despite the increase in text-based messaging, people aren’t talking less.

Voice calls remain, for the foreseeable future, one of the primary methods of communicating person-to-person.


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