SIP Trunking - An ISDN Voice Replacement - AAPT White Paper

ISDN

The commercialisation of SIP Trunking, in conjunction with the uptake of IP telephony, Unified Communications and IP/MPLS services are enabling

Australian businesses to achieve both direct and indirect cost savings.

This primarily being achieved through the benefits of a converged voice and data network, and enabled feature rich environment, via open standards.

ISDN (Integrated Services Digital Network) is a set of protocols and standards that support digital data transmission over the traditional copper PSTN network to deliver higher quality and digitally enabled services. The key feature of the ISDN is that it integrates speech and data on the same lines, adding features that were not available in the classic telephone system.

ISDN supports 2 types of connections: Basic Rate Interface (BRI) and Primary Rate Interface (PRI). The ISDN BRI service offers two B channels plus one D channel and a total interface rate of 192kbps. ISDN PRI in Australia provides 30 B channels plus one 64-kbps D channel and a total interface rate of 2.048 Mbps.

* SIP Trunking - an ISDN Voice Replacement * Benefits of SIP Trunking over ISDN Services * Other Thought Leadership Reports Unlike the traditional analogue PSTN services, ISDN as a digital technology has the following technical advantages over PSTN:

SIP Trunking - an ISDN Voice Replacement

* ISDN has faster call set-up capabilities * ISDN has a guaranteed data rate (64kps for each connection)

This paper provides an overview of the technology, its place in the converged environment, the reasons for adopting and the benefits of doing so. Technology Overview of ISDN and SIP Trunking

* ISDN is more suitable to handle different types of services (voice, data and video) supports channel bonding for higher bandwidth applications

* As a digital technology, ISDN enables more features for voice in combination with a PABX system, compared with analogue telephony.

ISDN costs from their on-premise PABX, by implementing converged voice and data traffic over a single pipe into the carrier network.

ISDN offers cost advantages over PSTN services where organisations require multiple telephone lines, and is a scalable voice solution for SME and MLE organisations. ISDN in combination with an ISDN enabled PABX system can significantly reduce the number of lines required, compared with a traditional analogue PSTN equipped PABX, to service the same number of endpoints. This, in turn, can save significant costs.

Typically, the Point A end of the SIP trunk is connected to the organisations PABX. The PABX system must have a SIP trunk interface, which is typically a native IP interface looking outwards from the customers telephony system. Traditional telephony systems can also make use of SIP Trunking through interconnection with a front-end SIP gateway or ISDN Access Device (IAD).

A TYPICAL ISDN VOICE NETWORK ARCHITECTURE

FIGURE 1 A TYPICAL ISDN VOICE NETWORK ARCHITECTURE

Thus, as voice traffic leaves the PABXs SIP trunk interface, it is routed via the carriers or service providers IP access and core network. The call is then routed to the appropriate PSTN gateway.

The Point B, or other end of the SIP trunk, connects from the carriers IP network via the appropriate PSTN gateway into the carriers PSTN network.

SIP Trunking

Benefits of SIP Trunking over ISDN Services

Session Initiation Protocol (SIP) is a signalling protocol used for multimedia communications. SIP Trunking offers Australian businesses an opportunity to significantly reduce their current

SIP Trunking has many advantages over ISDN, they include:

* Lower cost of access The cost of the

access component of SIP Trunking is typically significantly cheaper than the more costly ISDN services. Typically expensive individual ISDN line interfaces can be replaced by a single, (or multiple redundant) IP link (via either copper or fibre). This offers the added benefit of reducing capex and opex, as costs for an Ethernet line is dramatically lower than multiple ISDN lines, while offering significantly higher scalable bandwidth. * Lower call rates SIP Trunking typically offers slightly lower call rates than ISDN services, on a case-by-case basis. * Network convergence Convergence of voice, data and video over a common IP network provides economies of scope and scale and reduced network complexity. * Independence of Access Network SIP Trunking is carried over IP networks, meaning that SIP Trunking is independent of the access network type. SIP Trunking can be carried over copper, fibre, or indeed over wireless access networks. Hence, SIP Trunking becomes the preferred form of carrying voice traffic over fibre networks. Implementation of SIP Trunking positions a business for transition to an all fibre access network. * Flexibility in termination SIP Trunking enables more cost effective least-cost routing (LCR) and provides a far more effective and flexible disaster recovery option, as all voice SIP traffic can be quickly rerouted to a disaster recovery centre; a practical impossibility with ISDN. * Flexibility in dimensioning SIP Trunking services can be dimension based on average usage rather than peak

* Scalability SIP Trunking is scalable and granular on a per channel basis, allowing an increase or decrease in number of lines based on changing requirements. This can be as simple as provisioning or prioritizing a larger allocation of bandwidth to SIP out of the existing Ethernet link. Provisioning additional ISDN services, by comparison, requires change increments of 10 channels at a time, and typically requires new lines and line interfaces installed. * Enables feature-rich UC UC services can be more efficiently delivered over SIP and can potentially federate with suppliers and customers communication systems and processes, delivering decreased business process costs. .

Major carriers and niche service providers in Australia have offered ISDN for many years. ISDN has historically provided cost effective voice service for organisations with PABX systems. In 2009, Telsyte estimates that there are approximately 2 million ISDN lines in service in Australia. Usage penetration of ISDN services is especially high in the SME and MLE market segment, implying that these business sectors stand most to gain from a move to SIP Trunking.

The increased market penetration of IP telephony systems, particularly in the MLE market segment, has been a major reason for the decline of ISDN. According to Telsytes latest findings, IP telephony penetration in the MLE market has reached 17%, underpinned by the emergence of Unified Communications (UC). True UC features, functionalities and cost

savings can only be fully enabled in an IP environment. The migration to IP telephony and UC requires fundamental changes to the underlying infrastructure, to enable the convergence of voice and data over IP-based LAN and WAN. This requires moving away from legacy services such as ISDN to maximise feature transparency optimally. The uptake of real-time applications having high bandwidth requirements is also a key driver for moving away from ISDN.

These organisations come from the following vertical industries:

* Retail * Pharmaceutical * Government * Telecommunication * Primary * Education

Telsyte anticipates broader availability of SIP Trunking services in Australia will further contribute to the decline of ISDN in the short to medium term. However, ISDN may continue as a backup voice and data service for the next five years while copper access lines remain dominant, to provide redundancy and resilience to the primary network.

Alarmingly, 42% of business decision makers lack knowledge about SIP Trunking, creating a major inhibitor to uptake. Decision makers are also unwilling to take on additional risk by being early adopters of a nascent product offering, without understanding the hidden collateral issues.

Although SIP Trunking has been around for a few years, the market in Australia is still very nascent. While many MLE organisations have migrated to IP telephony, they are still in the process of evaluating SIP Trunking for enabling IP feature transparency outside of the LAN environment.

Another major reason for the low adoption intention, is that carriers have been reluctant in the past, to market the value proposition of SIP Trunking, due to the threat of cannibalisation of their existing profitable ISDN revenue and customer premise equipment (CPE) revenue e.g. PSTN/ISDN gateways.

Telsyte has found that only 8% of businesses, (including both the SME and MLE segments), with IP telephony systems in place, have implemented or are in the process of deploying SIP Trunking. Telsyte also notes that a number of large organisations across the country are either in the process of deployment, or evaluating SIP Trunking as an ISDN replacement.

Telsyte believes that the adoption rate of SIP Trunking will improve, as decision makers become better informed about the capabilities and benefits of SIP Trunking as a business process enabler. In addition, organisations that are migrating to IP telephony in the future will

evaluate the SIP Trunking proposition as integral to the migration process.

* Australian Unified Communications & Enterprise Telephony Usage and Directions, 2009 End-User Survey, November 2009 (Publication Number 80610) * Cloud Computing & Communication Services for the Australian Mid and Large Enterprise Market, October 2009 (Publication Number: 80625) * Australian Broadband and Fixed Telecommunications Market, 2008 Review & 2009-2013 Forecast, May 2009 (Publication Number: 80587) * Australian Mobile Services Market, 2008 Review & 2009-2013 Forecast, April 2009 (Publication Number: 80577) * Australian Business Mobile Usage and Directions, 2009 End-User Survey, August 2009 (Publication Number 80609) * Conferencing & Collaboration Technologies in the Australian Business Market 2008, January 2009 (Publication Number: 80556) * Comparative Analysis of Australian Smartphones and Vendors, 3Q2008, September 2008 (Publication Number 80513) * Australian Mobile Advertising Market Assessment, 2008, January 2009 (Publication Number 80560) * Show Me The Money Australian Consumer Mobile Multi-client Custom Study, 2008, July 2008 * Australian Enterprise Unified Communications Multi-client Custom Study, 2008, December 2008

SIP TRUNKING ADOPTION INTENTIONS IN AUSTRALIA Telsyte predicts that enterprises will increasingly adopt exchanged-based SIP Trunking as it become commercially viable in 2010, due to the significant cost benefits and operational synergies that it can deliver.

For instance, a single WAN connection with separate VPNs (i.e. one for voice and one for data) will be capable of servicing an organisations entire voice and data needs, thereby eliminating any need for ISDN to service the primary voice needs of the organisation, and in so doing can achieve more than 40% cost savings over ISDN service rental.

Telsyte estimates that SIP Trunking will generate $5 million in service revenue in 2009 and will reach over $150 million by the end of 2013, contributing to the decline of ISDN, particularly as Australia moves to a predominantly fibre based access network.

Other Thought Leadership Reports

* Australian Enterprise Telephony Market, 2008 Review & 2009-2013 Forecast, May 2009 (Publication Number: 80586)