VoIP Business

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9

BUSINESSACTORS

ANDRELATIONSHIPS

9.1 Panorama of Main VoIP Service Providers

Voice over IP (VoIP) should not be considered as a disruptive ser-

vice1since it fundamentally does not offer the user any difference inservice than before; in particular, compared to the old PSTN (PublicSwitched Telephony Network), for instance. IP networks, however,

have the advantage of making it easier to combine basic voice serviceswith advanced features, such as Instant Messaging (IM), file sharing,video communications, and more. is generates a major opportu-

nity for competitors to enter the market with relatively little cost and

minimal risk involved.By taking a holistic view of the VoIP business we can identify thefollowing three main types of actors.2

Incumbent Service Providers Virtual VoIP Service Providers Proprietary ird-Party VoIP Service Providers

In Figure 9.1, different operators and VoIP solutions are mapped in

relation to how standardized technologies are used and on what level theyare implemented with reference to the infrastructure that they require.

e incumbent operators own their entire infrastructure and usestandardized protocols (e.g., SIP (Session Initiation Protocol,3), RTP(Real-Time Transport Protocol,4), etc.), whereas the proprietary cli-

ents (see Figure 9.1) focus only on the highest OSI (Open SystemsInterconnection) layers with a pure application solution and they ownnone of the service and network infrastructures.

Virtual VoIP Service Providers resemble MVNOs (Mobile Virtual

Network Operators) that we have already seen in the mobile world.Virtual VoIP Service Providers, for example, only implement some


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130 IP TELEPHONY INTERCONNECTION REFERENCE

billing and charging mechanisms, but do not own any of the network

or service infrastructures themselves. erefore, these functions haveto be achieved owing to appropriate cooperation agreements with one

or several underlying Network Providers (see Section 9.3.4).

9.1.1 Incumbent Operators

Telephone Service Providers or telephone operators have for manyyears delivered exactly the core service that is most crucial for mostcustomersvoice. erefore, for most users, the means of transport isnot as important as many other things, e.g., the perceived quality of

the connection, user reachability, seamless mobility, and many others.Most telephony operators own the network and service infrastruc-

tures and, therefore, are in an ideal situation to offer this kind of service

and to widen their product selection.

Incumbent Operators Virtual VoIP Operators

Standardized

Proprietary

British Telecom

Telia Sonera

AOL

Parla US

Fring

Gizmo 5

Yahoo

Amivox

MSN

Nimbuzz

SkypeGoogle Talk

3rd Party Proprietary Clients

Nuvio

1Touch ToneFrance Telecom

T-mobileSiminn Enterprise Virtual

VoIP Servicesetc.

Owns Network Infrastructure No Network Infrastructure

Co-operational arrangementbetween incumbent and

3rd party clients

Hutchison

Skype

Figure 9.1 Classification of different VoIP actors. (Inspired by Verkasalo, H. 2006. Emerging

Trends in the Mobile VoIP Business. Helsinki, Finland: Helsinki University of Technology. Online at

http://www.netlab.tkk.fi/opetus/s383042/2006/papers_pdf/C3.pdf 5)

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BUSINESS ACTORS AND RELATIONSHIPS 131

Earlier on, telecom operators looked at new radio technologies as athreat to their current services and took a slightly defensive approach,

but nowadays operators, like for example Hutchison 3G, have real-

ized that these solutions bring them new exciting opportunities thatgive their customers more freedom and support the horizontal growthof the incumbent operator.

e main advantage that incumbent operators have is that, firstly,they already have the network in place, not to mention a huge cus-tomer base enabling them to make the paradigm shift toward VoIP.

Secondly, they have experience in roaming and interoperabilityarrangements which is extremely valuable for this type of business.

If operators are already offering a mobile telephone service, theyhave yet another advantage that the third-party proprietary Service

Providers and the Virtual VoIP Operators will not be able to offerarealistic approach toward Fixed Mobile Convergence (FMC). Oneof the important aspects of FMC is that it can be seen as a catalyst

to deploy services that are not bound to a given access technology. Aservice then can be engineered without assumption on the networkaccess used to reach the service (e.g., some implicit authenticationschemes will be abandoned in favor of service-centric schemes).

In order to a make seamless handover from a cellular network to,for instance, a WLAN (Wireless Local Area Network) network insidean office building or at home, the Service Provider would have to have

full control of both service sides. is means that without some sortof cooperation and coordination with the mobile Service Providersneither the virtual VoIP Operators nor the third-party proprietary

Service Providers will be able to offer this type of service.

9.1.2 Virtual VoIP Operators

Virtual VoIP Operators are similar to MVNOs, which are knownfrom the mobile cellular business. Virtual VoIP Operators own nophysical infrastructure, but offer services through cooperationalarrangements over the network and service infrastructures of another

operator. Virtual Operators possibly implement billing, charging,and some interface to sell the service to new customers. Some vir-tual Operators even function almost entirely through a Web site and,

therefore, need only a minimal staff.

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e main advantage for Virtual Operators is that they canstart operation very quickly with minimal cost and thereby min-

imize any business risk strategically. us, they leverage on the

Internet business model and established standards such as IMS(IP Multimedia Subsystem) or SIP and available hardware2 andcan maintain lean growth in proportion to the number of new

customers.e downside is, of course, their dependency on the network oper-

ator, which inhibits the virtual operator from growing vertically with

new services and customer products. e fact that they do not haveany control of the network and service infrastructure also gives them

very little negotiation power when it comes to roaming and interoper-ability with other Service Providers, which is very important in the

long run.

9.1.3 Proprietary Tird-Party VoIP Service Providers

As previously mentioned, VoIP is not a new technology and has

existed for many years. From Chapter 10, it can be seen that differentusers have different demands based on how they use the service, forexample, when it comes to cost versus quality, usability, reachability,

standards, integration with enterprise systems, etc.ird-party proprietary Service Providers focus only on the high-

est layer in the OSI model by providing a pure application solutionto establish client-to-client communications through the Internet.

Skype is probably the best known example of this type of service andthe one that has gained the most popularity. Other players in this cat-egory may include some of the Internet giants like Microsoft MSN,

Google talk, Yahoo Voice!, and others. For these Service Providers,the business model is very different and is based generally on gettingthe biggest user domain. eir income is then mainly based on adver-tisements or on value-adding services, such as PC-to-mobile transaction

services (e.g., SkypeOut service offering), voicemails, file sharing,

video communication, and others.is type of operator shares most of the same advantages and dis-

advantages as the Virtual Operators even though their way of operationis very different.

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e proprietary Service Providers usually offer voice services, which,in many cases, would be considered unacceptable for the enterprise

market in relation to security, quality, special enterprise services, tech-

nical support, and interoperability issues with other Internet servicesand PSTN/cellular networks, etc., and which are, therefore, morelikely to gain added success in the private market.

Note that some services belonging to this category are forbiddenin some enterprise networks and administrations. e main reason issecurity threats and avoiding channels such as entertainment varieties

that are not work related.

9.2 Cooperation Agreements between DifferentTypes of VoIP Service Providers

While the threat from the free-offering proprietary clients still remains,some Operators look at this inevitable development as an opportunity

to take an active part in the development instead of trying to fight it.Hutchison 3G is one of the best examples of this approach. ey havemade cooperational agreements with Skype to begin selling Skype-

enabled mobile phones to their customers. is, of course, will meanthat their business focus shifts more in the direction of value-addingservices, such as SkypeOut, file sharing, and more.5

Instant Messaging clients for mobile phones is another service that

is rapidly gaining popularity and some have already begun to offervoice telephony services from client-to-client, run on a mobile device,or even client-to-mobile by using a SkypeOut or similar solutions.

Some examples of these clients are Nimbuzz (nimbuzz.com), Fring

(fring.com), and Gizmo5 (giz5.com).e following section provides more details about the identified

business actors and relationships when deploying interprovider tele-phony services.

9.3 Business Actors Involved in VoIP Interconnection

Four business actors have been identified as main actors involved in

the delivery of interprovider VoIP services. Dedicated business rela-tionships are used to allow interaction between involved business

actors. More details about these actors and business relationships aredescribed in the following.

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9.3.1 Customer

e Customer role denotes the business entity that subscribes to

the service offering delivered by a given Service Provider. A service

offering includes several features, such as: (1) unlimited VoIP calls tolocal destinations, (2) unlimited VoIP calls to international destina-

tions, (3) free roaming, (4) ability to filter incoming calls, (5) supportof CLID (Calling Line Identification Display), (6) CLIR (CallingLine Identification Restriction), etc.

e subscription to the service is implemented via a dedicated con-

tract denoted as a Service Level Agreement (SLA) (Figure 9.2). issubscription is for the right to use the service.

An SLA is a document that specifies the technical clauses related

to the delivery of the subscribed service.e SLA is translated by a given Service Provider to a Service

Level Specification (SLS). Particularly, an SLA contract is trans-lated to access control rules and policies, enforced within service

nodes attached to the service domain managed by a given ServiceProvider. is action is required to allow the subscribed Customers

to access the offered services when invoking their SLAs. Specifically,the device used by the Customer is appropriately configured toaccess the service. e reachability information (e.g., FQDN (FullyQualified Domain Name) or an IP address) of the outbound proxy

to use when placing calls is to be configured. e configuration ofthe outbound proxy reachability information can be achieved usingDHCP (Dynamic Host Configuration Protocol,6,7) for instance, orany alternative means.

In addition, means to invoke the service (or the SLA) are alsospecified by the Service Provider during the SLA negotiationphase. ese means may be implicit or explicit (e.g., issuing dedicated

Service Level Agreement

Customer

Service Provider

Figure 9.2 Customer to Service Provider relationship.

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RSVP (Reservation Protocol) requests or logging into a Web page,etc.). Implicit means are reduced to access control policies enforced

in the service nodes to which the Customer device is connected.

ese rules may be coupled with other authentication procedures. Forinstance, authentication procedures can be enabled to check whetheror not a user is allowed to access the service.

e delivered service should fulfill the clauses detailed in theSLA. A Service Provider should implement service fulfillment andassurance functions that are responsible for checking if the services

delivered to the subscribed Customers are consistent with whathas been subscribed by them in the SLA. e Service Provider

should be able to continuously and, preferably in real-time, con-trol the level of its offered services and avoid receiving calls to its

hotline (which induces extra costs from an OPEX (OperationalExpenditure) perspective).

Service and network failures, such as service nodes outage, link

failures, degradation of the QoS (Quality of Service) of voice streams,and routing disruption, should be reported to the appropriate desksand action should be undertaken to solve the encountered problem.e problem should be solved (or at least detected and handled) before

receiving the complaints from the Customers.

9.3.2 End User

End User denotes the entity that actually invokes the service, owingto a prenegotiated SLA owned by a Customer (Figure 9.3).

Generally, End User and Customer entities are used inter-changeably. In this book, it is assumed that a Customer is the entitythat subscribes to a service offering, which is managed and offered bya Service Provider. End Users are all persons who use the service

End User

Customer

Delegates

Figure 9.3 Relationship between the End User and the Customer business actors.

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(e.g., members of a family use the services subscribed to by one mem-ber of the family).

A Customer has the right to invoke the subscribe service to one

or several End Users.e identity of End User is not meaningful from a service per-spective; only the one of Customer is required. In particular, for

legal intercept and data retention purposes, only the identity ofthe Customer is used. For abuse claims, only the identity of theCustomer will be provided to the authorities because the Customer

is the entity who is legally responsible of the use of a link or a service.It is up to the Customer to check whether or not End Users are

misbehaving. ese means are not specified by Service Providersand are left to the judgment of each Customer.

For enterprises or universities, a means to log the connected users(e.g., employees, students) may be put in place to identify, in a non-ambiguous manner, the suspected user, who may be subject to an

abuse claim.

9.3.3 Service Provider

As mentioned above, Service Providers put at the disposal ofCustomers a service portfolio. is portfolio is a packaging ofcapabilities resulting from the engineering of a set of resources and

equipments.Service Providers administer a set of equipment and service-

specific resources, such as billing means, authentication procedures,

and customer profiles databases, which interact for the delivery ofvalue-added services. ese equipments and resources belong to theService Provider domain.

In the context of IP telephony, a service domain is referred to as an

ITAD (IP Telephony Administrative Domain).Service nodes belonging to a Service Provider are interconnected

owing to the invocation of connectivity services offered by a NetworkProvider, as shown in Figure 9.4. Note that the access segment is

particularly critical and sensitive since, for instance, the loss of a fewATM frames may induce a failure of an ongoing H.323 call: only 3frames to 1000 (i.e., 3/1000) may be sufficient to avert the establish-

ment of an ongoing H.323 call.

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Service Provider and Network Provider may be managed bythe same administrative entity. is mode is denoted as a vertical

model because no separation may be enforced between the networkand service layer. In a vertical model, a Service Provider may enforcenetwork-related policies to prioritize some of its services.

From a service perspective, all VoIP actors identified in Section 9.1are considered as Service Providers. e way the service is engineeredis an internal issue.

It is worth mentioning that Customers have dedicated require-

ments with regards to the delivered services, especially in terms ofQoS and/or QoE (Quality of Experience) and availability. Pertinent

indicators to let the customer assess the level of its subscribed/deliv-ered services should be provided by the Service Provider owingto the implementation of suitable service assurance functions whereindicators, such as MTBF (Mean Time Between Failures), MTBR

(Mean Time Between Repairs), MTTR (Mean Time To Restore),and one-way delays are put at the disposal of Customers. In orderto meet these objectives (i.e., technical clauses included in SLAs),numerous engineering tuning operations are enforced and associated

means (e.g., tools, protocols, architectures, etc.) deployed to monitorand measure the outcome of engineered services. In addition, a NOC(Network Operations Center) can be designated to intervene and to

solve the experienced degradation or the unavailability of a service.

ITAD

AS

Figure 9.4 Service Provider to Network Provider relationship.

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Supervision is a critical component in the service managementenvironment and, therefore, in the value creation chain. Supervision

aims at providing inputs to operational entities that are in charge of

operating and maintaining services. Dedicated organizational andfunctional structures are to be implemented to efficiently monitorand assess the grade of deployed services and also the grade of

perceived delivered services by End Users. Appropriate actionsare consequently enforced so as to solve encountered problems andthen put an altered service back to its normal state. Various tools

(e.g., probes, reporting tools, etc.) are to be deployed to providefeedback on the status of running services and potential opera-

tional issues.In order to assess the level of operated services to Customers,

valid indicators must be defined and their values evaluated. eseindicators may be computed in real time or based on recorded data,such as CDRs (Call Data Records). Below is listed a set of valid

indicators:

Availability of the service.

NER (Network Efficiency Ratio) and ASR (Answer EfficiencyRatio) that are used to compute the ratio of efficient calls.

ALOC (Average Length of Call) is used to compute the aver-age duration of calls.

PRR (Premature Release Ratio) is used to compute the ratioof sessions that have been prematurely torn down.

SCRn (Short Communication Ratio less than n seconds) isused to evaluate the number of calls whose duration is lessthan n seconds.

However, considering the aforementioned issues, and the complex-

ity of deployed networks and services, additional indicators would beuseful to assess the overall level of delivered service:8

Session Request Delay (SRD): Defined as the time inter-val from the first call setup request containing the necessary

information sent by the calling party to the intended media-tion or called party until the last bit of the first provisionalresponse is received indicating an audible or visual status ofthe initial session setup request.

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Session Disconnect Delay (SDD): Defined as the intervalbetween the first bit of the sent session completion message and

the last bit of the subsequently received successful response.

Session Duration Time (SDT). Ineffective Session Attempts (ISA): Occur when a proxy oragent internally releases a setup request with a failed or over-

loaded condition. e output value of this metric is numericaland should be adjusted to indicate a percentage of ineffectivesession attempts.

Session Establishment Ratio (SER): is metric is numericaland is adjusted to indicate a percentage of successfully estab-

lished sessions. Registration Request Delay (RRD): A measurement of the

delay in responding to a user agent registration request. RRDis measured and reported only for successful registrationrequests. RRD is stated in units of milliseconds.

Ineffective Registration Attempts (IRA) are utilized to detectfailures causing an inability for a registration server to receivea registration request. is metric is measured at the origi-nating UA. IRA is reported as a percentage of registration

attempts.

Some of these indicators do not reflect the QoS, but the cred-ibility of reported data. Consequently, these ratios assess the QoS

of the overall service from the perspective of those communicationsfrom which a CDR has been recorded. is subtlety should be takeninto account in order not to reproduce the same practices as for a

PSTN.

9.3.4 Network Provider

Network Provider denotes the entity that is responsible for man-aging and administering a set of resources and capabilities for thedelivery of connectivity services. ese connectivity services may be

IP ones or Layer 2 ones (e.g., ATM (Asynchronous Transfer Mode),GE (Gigabit Ethernet), etc.).

For the delivery of added value services, Service Providers use thecapabilities of underlying Network Providers. e engineering and

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maintenance of these capabilities belong to the Network Provider.Only service-specific engineering is managed by Service Providers.

Furthermore, in order to deliver its services, a given Service

Provider may rely on one or several Network Providers capabilities.is relationship is implemented via a dedicated agreement called aConnectivity Provisioning Agreement (CPA).

A Network Provider may provide capabilities in distinct seg-ments, such as access, access aggregation, and/or core segments.

9.4 Business Relationships

e delivery of interprovider IP telephony services relies on theimplementation of various agreements between involved actors. ese

agreements are explained in detail below.

9.4.1 SLA (Service Level Agreement)

As mentioned above, an SLA is the contract agreed between aCustomer and a Service Provider. is agreement is a right toinvoke the service. Both administrative and technical clauses are

detailed in such a document. An SLA may be negotiated betweeninvolved parties. Dedicated means to negotiate an SLA may beput at the disposal of Customers. In current practices, mainly for

Residential Customers, SLAs are not negotiated, but are frozenby Service Providers.

An SLA may define the scope of delivered services and associ-

ated guarantees.

9.4.2 CPA (Connectivity Provisioning Agreement)

To deploy their services, Service Providers rely on underlyingcapabilities managed by Network Providers. ese capabilities areinvoked owing to the subscription to dedicated agreements calledConnectivity Provisioning Agreements (Figure 9.5). Connectivity

means the reachability and transfer capabilities resulting from theinterconnection of nodes and activation of resources.

A Connectivity Provisioning Agreement defines the scope

of the connectivity services and associated guarantees. Moreover,

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QoS and resilience clauses are defined in a given ConnectivityProvisioning Agreement.

A given Service Provider may be located in several countries,therefore, CPA agreements with several Network Providers arerequired to be under contract. Figure 9.6 provides an overview ofthe business roles and the interactions, while Figure 9.7 sketches

an example of the network configuration where one single ITAD isdeployed over three Autonomous Systems (ASs). An AS is typicallya BGP (Border Gateway Protocol) domain. More information aboutthis is provided in Chapter 8.

When both Service Provider and Network Provider refer to thesame administrative entity, the CPA interface is not explicit. But, thispractice may evolve in Europe if Functional Separation promoted by

the European Commission is imposed.

Service Provider

Network Provider

Connectivity Provisioning Agreement

Figure 9.5 Service Provider to Network Provider relationship.

1,*

Service Provider

CPA CPA

Network ProviderNetwork ProviderNetwork Provider

CPA

Figure 9.6 Multiple CPAs.

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9.4.3 NIA (Network Interconnection Agreement)

In order to extend the scope of their connectivity services beyondtheir administrative boundaries, Network Providers activate appro-

priate means to exchange reachability information and also to providetransfer capabilities to each other. Prior to the exchange of informa-

tion, a dedicated agreement is negotiated between involved parties.is agreement is called the Network Interconnection Agreement.is agreement may involve Network Providers that act in distinct

segments, such as access and core networks or between two NetworkProviders, which provide transit services (Figure 9.8). Examples ofIP NIAs are peering or transit agreements.

9.4.4 SIA (Service Interconnection Agreement)

Similar to NIA, Service Interconnection Agreements may benegotiated between two Service Providers. ese agreementsare put in place to extend the service scope and deliver the ser-

vice beyond the single administrative domain of one single ServiceProvider (Figure 9.9).

An SIA should describe the scope of the interconnection ser-vice, QoS, resilience, and additional administrative and technicalclauses. e format of the SIA is not standardized. Adjacent Service

ITAD

ASb AScASa

Figure 9.7 Example of an ITAD deployed over several AS domains.

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Providers are free to enclose in an SIA the clauses they believe to be

pertinent to each other. A cost is usually associated with an SIA andshould include indicators, such as MTBF, MTBR, MTTR, and one-way delay.

In the context of Interprovider IP telephony, the SIA should

include the scope of the interconnection: in particular, whetherreachable telephony prefixes are wildcard or restricted to a set of

well-defined prefixes, the amount of traffic allowed to be exchanged,the ratio of incoming to outgoing traffic, the signaling protocol to beused, accepted CODECs, etc.

9.4.5 Conclusion

Figure 9.10 summarizes these business actors and required businessrelationships, which are involved for the delivery of interprovider IP

telephony services. Service Providers need to cooperate in order tobe able to provide global reachability. is global reachability is pro-vided over the interconnection of various Network Providers.

Service Interconnection AgreementService Provider Service Provider

Figure 9.8 Network Interconnection Agreement.

Network Interconnection AgreementNetwork Provider Network Provider

Figure 9.9 Service Interconnection Agreement.

Network Interconnection Agreement

Connectivity Provisioning Agreement Connectivity Provisioning Agreement

Service Interconnection Agreement

Service Level AgreementService Level Agreement

Service Provider

Network Provider Network Provider

Service Provider

CustomerCustomer

End UserEnd User

Figure 9.10 Overview of Business Actors and Relationships.

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References

1. Barsi, T. 2002. Disruptive technology vs. disruptive applications.Telephony online, at http://telephonyonline.com/news/telecom_disrup-

tive_technology_vs/index.html(accessed July, 2011). 2. Malas, D. and A. Morton. 2010. Basic Telephony SIP End-to-EndPerformance Metrics. draft-ietf-pmol-sip-perf-metrics (work in prog-ress), September.

3. Rosenberg, J., H. Schulzrinne, G. Camarillo, A. Johnston, J. Peterson,R. Sparks, M. Handley, and E. Schooler. 2002. SIP: Session InitiationProtocol. RFC 3261, June.

4. Schulzrinne, H., S. Casner, R. Frederick, and V. Jacobson. 2003. RTP: ATransport Protocol for Real-Time Applications. STD 64, RFC 3550, July.

5. Verkasalo, H. 2006. Emerging Trends in the Mobile VoIP Business.Helsinki, Finland: Helsinki University of Technology. Online athttp://www.netlab.tkk.fi/opetus/s383042/2006/papers_pdf/C3.pdf(accessed October, 2011)

6. Droms, R. 1997. Dynamic Host Configuration Protocol. RFC 2131,March.

7. Droms, R., J. Bound, B. Volz, T. Lemon, C. Perkins, and M. Carney.2003. Dynamic Host Configuration Protocol for IPv6 (DHCPv6).RFC 3315, July.

8. Blau, J. 2006. 3GSM: Skype, Hutchison 3G partner on VoIP. InfoWorld.

com. Online at http://www.infoworld.com/archives/emailPrint.jsp?R=printis&A=/article/06/02/14/75370_HN3gvoip_1.html (accessedJuly, 2011).

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