The promise of IPX pushed by the GSMA appears on the surface to be the solution to all carriers' ills - all services over one connection, better control, improved QoS and transparency. It moves beyond a standalone MPLS backbone and guarantees end-to-end SLAs across IPX providers. But there is where the challenge starts - how do opeartors claiming they are IPX compliant manage SLAs across peering agreements with other IPX provider?
IP eXchange (IPX) was the key talking point at the GSMA's annual Asia-Pacific gathering of roaming and interconnect representatives in Bangkok in September. A handful of wholesale carriers and vendors touted the benefits of a single connection to deliver multiple services.
According to an Ovum report earlier in the year, the IPX Community has 22 members and 14 operators have implemented IPX. But the report went to say uptake has been slower than initially expected. While there's a lot of talk about IPX, we haven't seen massive announcements because many operators aren't fully ready (they lack a SIP core, for example).
Another reason is the lack of compelling applications requiring a quality of service that couldn't be supported on TDM infrastructure. That is now changing with the push to HD voice.
The renewed interest in IPX is driven in large part by the expansion of IP in the core, so more traffic is migrating away from traditional interconnects toward IP-based connections. There is enough IP infrastructure in place now that there's starting to be a critical mass effect.
Jayesh Easwaramony, Frost & Sullivan's VP of ICT practice, said the recent attention is primarily a result of the transition from voice-centric networks to data-centric networks, with a surge in connected devices and increased IP in many networks.
"With the transition to LTE, data roaming and interconnect will be a significant issue. In addition, with increased emphasis on customer experience management, IPX provides the ability for operators to guarantee QoS on their and other operator networks and there is a lot of possibilities on data roaming - prepaid, real-time monitoring, etc."
John Wick, VP of network services for Syniverse Technologies, agrees. "Operators are discovering that by consolidating legacy networks onto a single IPX network, they benefit from cost reductions while meeting existing connectivity needs with the flexibility to prepare and adopt to future technologies such as LTE."
Operators also attracted to the IPX concept as they start to prepare to move to an all-IP ecosystem.
"At some point, the IPX, it is said, will replace the global SS7 cloud - especially as operators, both fixed and mobile, slowly transition to all-IMS based infrastructure, rather than SS7," said William Dudley, Sybase 365's group director of product management.
But for now, he said, there are advantages in leveraging a network with guaranteed SLAs, quality and bandwidth.
David Kennedy, a research director for Ovum, told Telecom Asia that he thinks the interest in IPX is evidence of operators need for increased bandwidth efficiency. "Sure they could get those efficiencies internally by implementing IP, but to really get the efficiencies you want to terminate traffic on others people's networks in IP - you don't want to go to TDM."
He said switching from IP to TDM and back adds steps to the process, creates degradation problems and costs money. He went on to say it reflects a new level of sophistication in the region about the management of bandwidth for clients. "Physical capacity is expensive, so operators are squeezing the maximum output from the investments they've made."
iBasis CEO John van Vianen pointed out that a lot of the discussions on IPX have been technology driven. "We have to find the real business benefits and applications like lower capex to drive the case for IPX, otherwise it's just another transport mechanism going forward."
He noted that IPX does make sense for new players. "But as an industry we have to think what it means to the end customer and how to make the user experience better for bandwidth intensive apps, so we can save 1/6 of the port cost or whatever it is."
The structure
With the voice market in transition, carriers also searching for revenue opportunities beyond voice.
"But operators still have an obligation to carry minutes as well as their other bandwidth dependant services," said David Chalmers, Tata Communications' executive director for Asia Pacific. "IPX is a shift in the delivery model that facilitates the carriage of both voice and these other bandwidth dependant services over a single delivery medium."
The IPX model supports multiple applications (voice, data, signaling) over one all-IP based connection. Managing end-to-end connectivity over one network can help streamline costs while delivering high quality. It supports a variety of billable events such as time, volume and other units depending on the service.
Dan Warren, senior director of technology for the GSMA, said IPX is based on the same principle as GRX (GPRS Roaming Exchange), a collection of carriers that provide connections for data roaming. All the carriers follow a common set of commercial and technical principles. GRX operators provide connectivity between pairs of mobile operators directly or by peering with other GRX providers at GRX peering points.
He said the result is an ecosystem that allows new operators to sign roaming agreements with a large number of potential roaming partners quickly and easily.
IPX is the next step. With the growing number of P2P IP-based services, there is a need for operators to interconnect using IP rather than falling back to TDM-based interconnects. And because GRX is an IP-based interconnect model, a lot of the basic principles from GRX are ported into IPX.
"This makes sense technically since each translation from IP to TDM or vice versa results in delay and quality degradation, and it also makes sense commercially as the functionality to transition from IP to TDM costs money to buy and operate," Warren said.
Chalmers said that it's important to look at the benefits of IPX at two levels. At the service provider level the benefits are centered around quality and efficiency. At a community level IPX simplifies the challenges of establishing independent interconnections between operators and introduces a more streamlined commercial model.
He said the concept of building an IPX community eliminates the need to negotiate multiple bilateral physical links between individual partners by creating a network of hubs. "Simply stated, a service provider needs one IPX connection point to gain connectivity to multiple members on the IPX network."
Cultural shift
Industry observers say moving from a transaction-based model to a services-based model will be a commercial challenge for operators, with concerns raised over curbing IDD minutes.
Sybase 365's Dudley said it will certainly be a methodical transition, but one that is inevitable as the industry evolves to all-IP.
He said some operators will migrate faster than others, but it is too early to tell whether or not it would impact voice minutes.
"Mobile operators will likely adopt faster, and will likely drive the wholesale voice providers to make this transition."
The voice interconnect revolution, Syniverse's Wick pointed out is centered on the charging principals of voice transitioning away from the traditional minutes-of-use model.
On an IP-based network, voice is transported as a packet alongside data, signaling and other applications, eliminating minutes of use, he said. "This is a dramatic transformation from a business model perspective, and is one that is being examined by industry groups, such as the GSMA's VoLTE initiative."
With declining margins and the migration to VoIP traffic, Chalmers said all service providers need to be open to new commercial charging models for more complex service offerings. The shift away from minutes, he said, no doubt requires a paradigm shift from the traditional voice settlement.
"Tata offers that option now. Where like minded and similar sized operators exchange traffic over IPX, they may opt to take our port or service based-pricing model and agree to their own terms for terminating each other's voice traffic."
He said its IPX offering allows both transactional and service-based charging.
"The challenge many carriers face is that voice services are sold to their retail and wholesale sectors on a per minute basis and they automatically convert their service-based or port charge cost of delivery for voice into a per unit charge in an effort to minimize risk. That is certainly cultural and a legacy of our per-minute payload charging history," Chalmers explained.
"IPX charging arrangements can facilitate settlement terms between two carriers outside traditional ideology and allow settlement terms to be innovative enough to mirror their own bundled flat-fee retail offers."
Eric Masseboeuf, head of international products at Orange Wholesale, noted that France Telecom's retail operation has moved from transaction-based to services-based, and the enterprise segment has also made such a move for its on-net to on-net traffic.
"So there is no reason why the wholesale ecosystem could not accommodate such a transformation of its business model. Of course, it will induce some risk management to ensure a fair usage and avoid triage/tromboning of some players ready to capture/abuse any niche opportunities."
Taking on the OTT players
Many in the industry suggest that the IPX will help operators prepare to compete better with the OTT players. The quality and efficiency that can be delivered via an IPX framework, Chalmers said, can create a foundation to differentiate service from the OTT players.
He said HD voice and advanced voice services like mobile video telephony are key applications that can be catered for on an IPX network, and there will be a clear gap between the quality of voice services provided over IPX and the service provided by OTT providers on the public net.
"Having said that though, there is no doubt that OTT players have grown the voice pie. Going forward there could be two distinct levels of voice service - one carried on a suitably engineered IPX network and a lower priced sometime free best-efforts service that appeals to an entirely different segment of the market."
Masseboeuf agrees there's room to differentiate, saying that IPX can help leverage all-IP added-value services between mobile operators. "Securing end-to-end HD voice quality differentiates mobile operators from OTT's best effort quality via the internet."
Rather than take on OTT players, Sybase 365's Dudley said that IPX could help operators work or partner with OTT players. "OTT players could certainly leverage the IPX - they are just the type of "enterprise" that could benefit. IPX creates opportunities for operator groups to partner with OTT players."
The challenges
Beyond the buzz and marketing type, Frost's Easwaramony says the challenge will be the transition to all IP since there is a lot of TDM originated and bearer traffic that will be difficult to run on IPX, since operators' networks are still hybrid.
"In addition, the chain is as strong as the weakest link so different operators will be at a different stages of transition and it will be difficult to guarantee end-to-end QoS. Historical experience with GRX was also relatively slow when it was initiated."
iBasis VP for Asia Pacific Patrck Meijer said the mobile operators are more interested than the fixed-line guys because the concept seems so simple, so they have the impression it will be easy to implement and save them a bundle.
"I'm not sure that's going to be the case because in the end a lot needs to be done. But quality service will go up and it will be easier to do business because you'll have one big interconnect."
But mobile operators can't run it on their own. "There needs to be value added for both parties."
Ovum's Kennedy said one concern is the possible formation of private clubs that might encourage collusion between partners. "It's a concern IPX to be wary of and manage in the future. They need to operate in an open and transparent way so they don't attract regulator attention."
Having said that, he hasn't seen any evidence that this problem is developing.
i3 Forum chairman Philippe Millet said that IPX makes sense for a lot of services, like data exchanged between mobile operators. "In that space things are happening," he said. "But it can't be all things to all operators."
He claimed IPX doesn't work for voice. "You need to transform the IPX and you end up with something not far from what we have now - voice over MLPS VPN. It's a fuzzy, broad definition," he said. "It's not same as the original IPX model."
The i3Forum (www.i3forum.org) was due to release a "Voice over IPX" white paper early this month, with detailed specifications on implementing voice interconnects using the IPX model. Millet said to make voice work and offer the required quality and security, the specs departed slightly from the IPX implementation model for data services. "This is one way to do voice over IP."
Choosing a provider
While IPX and the underlying IP VPN technology are mature, operators need to select their IPX provider carefully.
"Today, a mobile operator can choose the best SMS hub provider, the best voice provider, the best GRX provider. With IPX, you will have the opportunity to bundle all those services," Masseboeuf said.
He said it's essential your IPX provider is a real multi-service provider - neither too mobile or data centric nor too voice centric.
Another key issue is the readiness and willingness of your IPX provider to implement open connectivity.
"Some IPX providers might be seeking to capture an on-net community with attractive pricing, and might not be interested to peer with other IPX providers, ensuring fair competition/open connectivity," he said. "In this case, an operator might then have to interconnect with other IPX providers to reach other on-net community, hence the benefit of consolidating all local loops of different services onto a single IPX plug will go away."
Roaming support for LTE
CSL completed its IPX trial with Telecom NZ and Sybase 365 in August.
CSL's EVP of wholesale Paul Hodges told Telecom Asia the key objectives were to verify the SIP-I and IPX proxy connectivity proposed by GSM Association, figure out how to integrate such connectivity in a production environment and identify potential problems prior to production. To make the trial realistic, he said they used production SIM cards to generate roaming traffic.
The next step is incorporate the design, e.g. SBC and SIP proxy set-up that they learned from the trial, into a production capacity, which requires the purchase of additional network related equipment.
CSL aims to be ready for voice over IPX by early 2011.
CSL is moving to IPX primarily to support LTE roaming. Hodges said traditional GRX architecture simply would not be able to support LTE speeds. "We also see potential for the IPX to carry roaming voice and signaling traffic, in the medium to long term."