Posted: 07/2002


By Alex Petrov

For much of its history, telephony
espoused technologies that favored vertical integration. Therefore, it is not
surprising that most softswitch-based network implementations to date have been
vertical as well. However, in the times of austerity, the need to maximize
efficiency brings outsourcing and network-sharing tactics to the fore.
International market for spot rates, rendered a de facto commodity in the last
five years, appears to be particularly ripe for transition toward a horizontal
business structure.

The softswitch model (i.e., open
unbundling of media access, call control and applications) is fundamental to
such transition. Softswitching allows service providers to (gradually) align
themselves along the architectural layers, while outsourcing the noncore
functions. Specifically, hosted call control can be defined as outsourcing of
the call control resources, i.e. switching, signaling and routing. Scope, volume
and quality of the hosted call control services are defined by service level
agreements (SLAs). Altogether, hosted call control would crossbreed SS7
providers (in the sense of common-channel call setup/teardown), application
service providers (ASPs) and, to a degree, value-added resellers.

The primary technical merit of
hosted call control is reduction in the number of signaling and routing
intermediaries along the call setup path (gatekeepers, media gateway
controllers, proxy/redirect servers, location servers, etc.). Fewer routing
entities result in shorter post-dial delay (PDD) and easier detection of
looping. In addition, this facilitates effective aggregation of the routing
attributes, which is essential to stability, convergence and scalability of the
distributed routing database. Aggregation and convergence rate are important
given that, nowadays, wholesale carriers route to more than 30,000 global

Secondly, dedicated hosted call
control networks can be engineered and managed toward reliability and
cost-efficiency. Indeed, pooling is a sensible alternative to replication of the
same standard design practices (e.g., redundancy, load-balancing and backups) at
each carrier. These practices are resource intensive; yet by themselves, they
bring little differentiation to the product offerings. Furthermore, depending on
the scale, footprint and route diversity, hosted call control overlays could
achieve the extent of fault tolerance ranging between SS7 and IP on a
per-application basis.

Three-Layer Softswitch Architecture and Hosted Call

Source: Author

Finally, hosted call control
providers, by the virtue of their neutrality, would be instrumental in
correlation and settlement of call detail records (CDR). Timely, accurate and
(collectively) affordable reconciliation of billing information is key to
resolving billing disputes and tackling the larger issue of credit risks that
has stalled the industry.

Technical benefits of using hosted
call control are reinforced by business considerations. Hosted call control
networks, if properly designed and scaled, balance out call control resources,
mitigate the risks of overcapacity in the softswitch layer, and thus reduce
collective carrier spending. Moreover, sharing of call control resources — and
other resources directly associated with them — stimulates various economies of
scale, as shown in the table below. Of course, this is only true for resources
that are tied to call control. For instance, an online billing application may
be a critical differentiator for the end user. On the other hand, a routing
application with the same functionality as competitors’ would give a carrier no
competitive edge.

In a broader context, hosted call
control, through the community of interconnected carrier customers, is open to
the phenomenon of net effect. Expressed as Metcalfe’s Law, it states the
usefulness, or utility, of a network to new and existing users equals the square
of the number of users. That is, incremental utility of the network is
proportional to the number of active users. However, in order to achieve and
sustain the virtuous circle of growth, HCC providers must optimize provisioning,
routing and trouble ticket interfaces and back them with effective operations

The key design issues for hosted
call control are scalability, reliability, interworking and extensibility.
Scalability implies sustaining performance at the acceptable level given the
capacity and protocol constraints (e.g., SS7 timeouts) and under changing
traffic patterns. To that, reliability requirements add the dimension of
response to the network failures. Interworking spans diverse issues of SS7/PSTN
interconnection, VoIP signaling mediation and horizontal and vertical
interoperability for protocols and specific vendors. Finally, extensible design
would keep the hosted call control network open to new session types: messaging,
presence management, online collaboration, gaming, video and yet-to-be-defined
others. With the international long-distance market gradually yielding to
converged end-user applications, extensibility is crucial to the long-term
success of hosted call control providers.

Who could assume the leading role in
the hosted call control transition? The prime candidates, both interested in the
leading role and capable to do so, would be today’s providers of SS7 access
services, distributed clearinghouses and advanced VoIP operators. In the
meantime, providers of managed network services and voice exchanges offer
carriers a stepping stone between the TDM and next-generation technologies.

In conclusion, the hosted call
control approach, or outsourced call control, offers carriers positive
networking externalities in terms of scalable routing, reliability, CDR
processing and reduced capital risks and expenditures.

Dr. Alex Petrov is pursuing a
master’s degree in business administration at Pepperdine University. He has been
designing softswitch and VoIP networks for the past five years, most recently as
a senior design engineer with New Global Telecom, provider of wholesale managed
network services. He can be reached at


Potential for Softswitch-based Networks
Capital Expenditures Operational
Softswitch Media Applications OSS  Operations Transport SS7 R&D
Platform Gateways Access
Differentiation Low High Low*  Low* Low* Low Low Low
Sharing Feasibility High Low High* High* High* Low High High
Est. Capex % 15 60 15 10
Compiled by the author; *pertaining to call control only


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