Posted: 06/2002


By Khali

THE MOST NOTICEABLE change to directory assistance (DA) over the last century has been the option of dialing 411 instead of 0. If the same were true of long-distance service, a 250-mile call still would be 40 cents per minute.

DA’s arrested development may be ending soon if one service bureau has anything to do with it. The company, Preferred Voice Inc., seeks to change the function and profitability of outsourcing DA with the launch this month of its “411 Information Gateway” service, a wholesale service for carriers. Already, one carrier, Smart City Telecom in Orlando, Fla., has signed on, and Preferred Voice expects many of its 48 carrier customers using its Voice Integrated Platform System (VIPS) will add the new service.

Today’s 411 request usually is delivered to an operator service provider (OSP) call center where the caller is prompted for the city and state, followed by the name. The caller is often transferred to a recording of the number, completing the transaction.

The key to transforming 411 into an information gateway is speech recognition technology that enables Preferred Voice’s platform to automate the completion of DA calls fully and to offer on-demand content services, such as driving directions, stock quotes, movie listings, etc.

New research published April 30 by The Kelsey Group confirms the opportunity. Growth in core speech technologies, the research firm reports, will trigger a multiplier effect, driving voice-activated and enhanced telephony services revenues for consumers to $1 billion by the end of this year and $27 billion by 2006. Similarly, revenues from business-oriented services will approach $175 million by year-end 2002 and $2.5 billion by 2006.

“Specific voice-enabled applications, if large enough, have stimulated specialized platform solutions. In the past 18 months, this has become especially evident in directory assistance,” says Dan Miller, co-author of the Kelsey Group research. Miller notes that in Sweden, for instance, Respons AB, the DA services company recently spun out from Telia, outsources to its former parent a fully automated DA service using technology from Philips Speech Processing as well as traditional live operator service. The automated version is offered at a roughly one-third the price of a call to the live alternative. Finnish carrier, Sonera, pursues a similar lower-priced, fully automated alternative to live operator DA employing technology from Phonetic Systems Inc.

And in the United States, Telelogue Inc., the 18-month-old spinoff of Telecordia Technologies Inc., announced April 30 that it has teamed with Nuance to launch Voice Directory, a wholesale service bureau that automatically provides callers with 18.5 million business and government listings — about 80 percent of the addressable DA inquiries — and offers them call completion.

The Telelogue service is directly competitive with BusinessConnect, the automated DA component of Preferred Voice’s 411 Information Gateway. Preferred Voice chairman and CEO G. Ray Miller, a veteran of the operator services business, told PHONE+ his experience in the DA business pointed to the opportunity to eliminate the operator, which he says eats up about 62 percent of DA revenue. He also confirms that more than 80 percent of DA calls are for numbers of local businesses. “People are usually looking for restaurants or movies. It’s a smaller universe than anyone thinks,” he says, explaining that this makes it possible for Preferred Voice to deploy speech-recognition databases for the standard industrial classification (SIC) categories most requested by the consumers in a telco’s serving area.

These databases are accessed by the company’s platform, which combines proprietary software with the natural dialogue speech-recognition technology of Philips Speech Processing. The resulting automated DA service links wireless and wireline users to any business by simply speaking the business’ name. Uniquely, it will accept and process common versions of the same business name, such as “Dr. John Brown’s Office,” “Dr. Brown’s Office” or simply “Dr. Brown.” The subscriber call information is then delivered by Preferred Voice’s SS7/ISUP network to the telco switch, and the originating telco switch completes the subscriber call and releases the speech platform from the call. Callers’ requests that cannot be processed automatically are forwarded immediately to the telecom carrier’s OSP for call completion.

BusinessConnect was put to the test in a two-month pilot during fall 2001 with customer Rural Cellular Corporation, a wireless carrier based in Alexandria, Minn. The data collected during this pilot showed that BusinessConnect successfully processed 95 percent of the callers’ requests without the assistance of the carrier’s OSP. In addition, user surveys indicated that 90 percent preferred the method to traditional DA, and 82 percent said they would pay $1.50 and $7 per month for the service.

BusinessConnect is the DA “leg” of the 411 Information Gateway, explains Ray Miller, adding that other legs can be added as developed. The initial launch, for example, includes access to content, such as driving directions, stock quotes, news, sports scores, weather forecasts, lottery numbers and horoscopes. He says that sometime this fall the company will roll out a third option — speech-driven text-to-speech e-mail.

Like DA, content services are accessed by speaking instead of pushing DTMF tones. Callers will say, “content” and then specify what type of content they are seeking. For example, someone wanting Arizona LOTTO results would say “lottery.” VIPS would prompt for the state, the caller would say, “Arizona.” VIPS would prompt for the date, and the caller would says, “May 1.” The results would be returned.

The 411 Information Gateway can be delivered to a wireless or wireline telco without requiring upgrades to present switch hardware or software (see diagram).

Click Here for Diagram

Source: Preferred Voice Inc.

As such, Miller says it can help carriers boost margins on tariffed services like DA and call completion. It guarantees delivery of DA (both automated and attended) at 10 percent less than what carriers are paying to their present OSP since about 80 percent are going to be automated fully using BusinessConnect. But that’s not where the money is, he says, noting that Preferred Voice can help carriers boost margins on call completion by charging them more than 30 percent less than their current OSP. It also can offer call completion on toll and long-distance calls.

For nontariffed services, Preferred Voice enters into a revenue-sharing agreement with the carrier and any applicable content providers. Content, he says, averages 87 cents per call retail assuming a 50-cent per-call fee plus 15 cents per minute.


The Kelsey Group


Philips Speech Processing

Phonetic Systems Inc.

Preferred Voice Inc.

Respons AB

Rural Cellular Corp.


Telecordia Technologies Inc.

Telelogue Inc.


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