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Deployment Of VoIP Long Distance Call Service

Tuesday, June 8, 2004

When we look around for the next driver for memory consumption, communications definitely comes on my radar screen. The obvious one is cell phone handset that uses multiple memory configurations. One not so obvious memory user is Voice over IP phone that has quietly grabbled up both DRAM memory and Flash memory. I thought I would just look into that horizon. Wow! Look what I found really surprises me.



Voice over IP (Internet Protocol) has become a household name in the last few months. We cannot go through a week without reading about the frantic world of VoIP. It shows up on newspaper, TV, mailboxes and even on billboards. Well, what does VoIP really mean? It means the voice of the telephone call is turned into digital signals and transmitted as digital packets over the Internet infrastructure like our email and our Web browser. Since it is an Internet network transmission, it is not subjected to the many layers of taxes that burden our phone bill. The result is avoiding long distance call charges when you have two IP phones talking to each other over the Internet.


But the scenario above is only good when both the originating party and the receiving party both have the same type of compatible phone. It still prohibits the user from calling any regular phone that is populated in all parts of the world. That is why VoIP gateways are invented. A VoIP gateway is an electronic box that can accept Internet calls on one end and translates it into conventional phone call on the other end. In other words, it has an Internet network input and a conventional phone line output. This way, the IP call comes into the gateway can now be redialed out to any regular phone number in the world.


Of course, this arrangement has shortfalls. Your toll free calls are restricted to the local area phone numbers that your gateway can reach as local calls. Any other area code numbers would still incur long distance charge from the phone company. The solution to this problem is the deployment of gateway boxes into different cities under different area codes. This way you will be able to selectively call the gateway in the city and the area you wanted to call. In this case, the deployment of gateway boxes into different cities becomes too big a task for an individual to handle. A lot of companies saw this opportunity and got into the service of deploying gateway boxes into different areas and provide low cost long distance phone services.


New Business Model to Deploy VoIP Long Distance Service

If the deployment of gateway boxes into every corner of the world is the task, it is certainly a very difficult one that not many companies can accomplish quickly. A startup VoIP company in Richardson Texas might just have the right solution for that. Advanced IP Communications (AIP) manufactures a gateway box with PBX (private branch exchange function). It takes Internet calls and can translate into 8 CO (central office common phone) lines. It has all the features found on a small business office phone system together with full voice mail capabilities.


The business model for a low cost long distance company is to resell these AIP boxes into small business offices all over the world. Since the business model is to make profit on long distance calls, these boxes can be sold even at just breakeven prices. While these boxes can interface to 8 regular phone lines, the long distance service company can give the business customer the use of 6 phone lines and reserve the other 2 phone lines for public long distance services. Since the end user is getting his business phone system at cost, many can be sold quickly. The end user would quickly help populate every corner of the world. The long distance company would have essentially deployed many VoIP gateways at almost no cost to itself.


Let’s Look at the Technical Issues

The AIP 832 small business VoIP phone system has all the features that a small business phone system has. It has automatic call attendant to direct calls to the proper extension. It has multiple voice mailboxes for messaging and retrieval. It has call transfer and call forwarding for office convenience. It also has a TCPIP (Internet Protocol) link to the Internet. On top of that, it also has a powerful microprocessor to accommodate custom features that the long distance service operator might want.


The Internet protocol on the AIP box would communicate with two different devices through the Internet. One is the call management server to obtain call routing information. The other device would be another identical gateway box in another city.


The Long Distance Calling Scenarios

The AIP box sitting at the small business office would normally handle all the local call transactions. When a local call is generated, the call would be route through the first 6 customer owned CO lines. The system would work like a normal office phone system.

However, when a long distance call is dialed within the system, the box would first notify a central computer server through the Internet. The central server is usually located at the long distance company premises. In a split second, the central server interprets the area code dialed and survey the availability of another similar gateway box at the destination city. The central server then feed back and instruct the originating box to route the call to the available destination gateway. The destination gateway will then redial the number through local phone line.  This way, the long distance toll is avoided. Since the central server also knows the duration of the call, the long distance company can bill the user accordingly.

But this design not only can serve the business that owns the box, it can also serve other public long distance users. A long distance calling card user can dial into a local gateway number and generate a long distance call just like he is dialing the long distance call from inside the same office. When he dials the calling card number either on a local prefix or a 800 prefix, the local telco will get him into a call hunt group to hunt for the next available local gateway.

The Software Management System

The long distance service company charges the customer by the destination and the duration of the call. Therefore, it is important to capture the detail information on the call for management and billing purpose. The software is divided into two sets. One works at the gateway box and the other one works at the central server.

The management software at the gateway is to report the long distance prefix and number dialed to the central server. In the case of a calling card call, the gateway software will also have to communicate to the central server to authenticate the access code and to charge off to the account. It also has to route the call to the destination upon feedback instruction from the central server.

The central server plays a more important roll. It constantly scans all the gateways to monitor their availability. When it receive a call initiated from a gateway, it quickly figures out the destination gateway should be patched to and notify the call initiating gateway to make the IP connection accordingly. Another important function of the central server is to capture the call charges information for billing purpose. A backend billing program is also needed for the proper revenue collection.

The Profit Model

This model essentially puts the cost and ownership of the gateway boxes into the customer’s hands. In return, the customers gain a full function PBX system with voice mail and reduced long distance toll. The long distance operator gains a revenue- generating gateway location. It is a win-win situation that both parties would be happy.

As for the system operator, the more gateways are deployed, the lower the cost of the service would be. His only cost would be to pay for the extra local phone lines at each gateway on top of maintaining the central server and billing process. He would normally charge about 50% of the standard long distance charge but pays only local line costs.

This model works best when the system operator also provides broadband Internet services (DSL or T1). He can offer service package discount to attract more business customers. It is the business customers that will host the gateways. The more gateways deployed, the more long distance call volume can be. The entire operation is fully automated and requires very little human intervention. It can, therefore, administered with only a small staff. The margin can be very high with growth tided to future deployment. The return on investment can be very fast and lucrative together with long-term promises.


With the availability of the equipment and the system software on turn-key basis, this kind of system is expected to be deployed quickly to many parts of the world.

By: DocMemory
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