To each his own

There is still a question mark in people’s minds about IPX’s usefulness in the way it is defined at the moment. Here is Eli’s' opinion on that subject, how he sees IPX picking-up in the next few years, and how XConnect is positioning itself in the evolving IP ecosystem?

'I believe a critical part of the industry's development is to enable end-to-end IP, which is the ultimate goal we are all aiming for'
'Certainly the basic concept of hub-based interconnect and, where appropriate, with additional ENUM registry or phone number based routing, is an essential part of the industry's evolution to enable end-to-end IP. In addition, we are seeing that there are big drivers pushing the industry towards the end of 'traditional' PSTN, this coming from customers, operators and regulators alike. Consequently, end-to-end IP using a scalable, economic and efficient model is a 'fait accompli'.

From that perspective, the goals of IPX are absolutely vital and I believe it will experience considerable growth. What I would say however is that for us, the IPX is not necessarily the specific and narrow definition of IPX as per the GSMA. I’m referring to a more flexible, policy-based exchange, with a wide range of services, flexible models on registry, on network, as well as the signalling and media, and including a diverse set of policies on settlements as well.

So the overall drive behind enabling federated exchange or IPX-based end-to-end is critical, but it won’t follow only one model.'

'There are many different market segments in our glorious telecom space and all have different needs and expectations.'
'If we look at the voice market alone, there are a multitude of voice services and requirements: national and International voice interconnect, fixed and mobile voice, LTE voice, OTT voice, HD voice, video calling, video conferencing, multi-screen tele-presence, IM presence, to name only a few. Additionally, each stakeholder in this environment (service providers, carriers and users) have different expectations and requirements in terms of reach, security and quality of the underlying network layer.

For some of those segments for example, a private QoS-enabled, secure layer 2, layer 3 interconnection is absolutely vital, while some really do not care about it at all, and public IP is completely acceptable.

So it really is horses for horses, and each operator, with their mindset and their customer requirements, will make their own cost-benefit analysis to define which IP solution meets their needs. In our National Federation deployments for example, we typically see a requirement for QoS enable Private IP for domestic voice traffic, whereas for international voice traffic, Public IP is usually sufficient.

OTT or TNT?

Nowadays, we cannot have a telecom conversation without mentioning the big bad 'O'. So as I like to comply, I continued my discussion with Eli in that direction, to find out, in his opinion, if and how OTTs fit into the IPX model and how XConnect is addressing this growing segment?

'There are always opportunities to create value in interconnecting on appropriate commercial terms and IPX will be one of the solutions to enable this in the IP world.'
'For most OTTs today, their ability to create revenue and margin is not based upon on-net calls, because those are free, but rather on off-net outbound calls, which is where some successful OTTs can be making millions in revenue from in and out voice services for example. Looking ahead, what will be interesting will be the application of this model to video. Again, if today the only ability for video calls is on-net between users of one service provider, imagine the possibility for video out, where service providers could be making multiple millions from video as well.

OTTs therefore are beginning to understand and recognise the value of interconnection, and whether it is monetised or on a bill and keep model is an economic decision. There are always opportunities to create value in interconnecting on appropriate commercial terms with other networks and IPX will be one of the solutions to enable this in the IP world.

I am a strong believer that initially there will be kind of a walled-garden mindset, but the commercial value of interconnection is recognised and will grow in popularity with OTTs.'

'We have the underlying technology and mindset to work with OTTs.'
'OTTs represent a phenomenally strong-growing segment and are already a trigger of change in the mobile voice and video space and from that perspective, we are engaging heavily with them. Some have advanced requirements beyond simple in-out traditional type interconnect services, namely around registry and federating with other OTT players, which present a complex set of dynamics. We are therefore pleased to be working successfully with them, to meet some of their more advanced requirements.'

'Initially, we expect that it will be the small OTTs who will be happier to work together and combine to create bigger entities.'
'OTTs are not yet fans of interconnecting with other OTTs, because it means that they have to share their customer phone number information. A significant amount of XConnect's intellectual property and R&D has gone into enabling our registry services to ensure that the ownership of that data rests entirely with the service provider providing that information. We ensure that the data owner retains complete control.. We support a full plethora of policy capability to protect and secure the data, so that it is only made available in a way that fits into OTT's commercial model.'

Watch this space

XConnect recently announced the investment of US$10 million from Young Associates and Crescent Group. I discussed with Eli about how XConnect plans to capitalise on this new cash injection to continue its growth plan in the IP world.

‘We look forward to utilising this cash injection to stimulate mainly two growth areas.'
'The first being the addition of three or four new countries in Asia, America and Europe to complement our existing national federations in the US, Germany, the Netherlands, Scandinavia, South Africa and Korea. The second is to allow us to benefit from the growth in new IP communication areas such as video calling, video conferencing, or enterprise services. This is a recognition of our understanding of the market’s evolution and we will be developing our product portfolio and enhancing our existing services to be fully capable to support these new requirements.'

'Our biggest challenge is essentially waiting for the market to be fully ready with IP interconnect and IP services'
We do not see ourselves as a traditional wholesaler, and through our advanced technology services we see ourselves supplying more types of federations beyond the national side in the video conferencing space with our video interconnect exchange (VIE), our HD alliance, utilising these capability for life beyond voice. So from that perspective, our biggest challenge is essentially waiting for the market to be fully ready with IP interconnect and IP services, whether it is LTE, RCS, or any of the video calling/video conferencing UC collaborations. The challenge we face is that our success is predicated on that migration to IP as fast as possible – so may it happen quickly!

The free fall of termination rates across the world and certainly across Europe combined with the increase in complexity that forces optimised, number-portability corrected phone number-based routing, will create an opportunity for new innovative players, with capabilities to support end-to-end cross-network interconnect, and that’s where XConnect is positioned.

The man for the job

Eli and his team are bringing new innovative ideas and services to the telecom industry and are busy pushing the boundaries. Strong from his experience and vision in IP communications and absolute focus. I can say that Eli is definitely the man for the job and we can expect to see more of XConnect in years to come.

All I can now do is conclude with the words that this interview brought to my mind:

'Watch this space'

About the Author:

Isabelle Paradis, President of HOT TELECOM is an international telecoms expert, with over 20 years working experience in the Americas, Europe, Asia and Africa.

HOT TELECOM has been serving global operators, governments, equipment vendors and telecom investors for over 10 years, providing leading edge market research and consulting services to industry leaders around the globe.

For more information on our HOT INTERVIEWS program, please contact Isabelle Paradis at: paradis@hottelecom.com or at +1 514 270 1636

Article edited by: