CLECs, wireless operators see a path to efficiency through SS7 outsourcing

If you want something done right, don't do it yourself " is the emerging mantra for start-up competitive local exchange carriers and other telecommunications companies learning to outsource their most complicated SS7, intelligent network and Advanced Intelligent Network needs.

Budget limits, a tight job recruiting market and questions about next generation platforms are helping lead resource-constrained operators to SS7 service bureaus. And the emergence of IP-based services and converging technologies promise a healthy outsourcing market for years to come.

I need a hub Outsourcing makes sense when any customer group, regardless of size, needs a certain expertise with time-to-market or cost advantages, says Bill Gerhardt, group product manager at hub provider GTE Telecommunication Services Inc. And GTE TSI's customers come from all walks of telecom life."The profile of our typical customer certainly varies: We have customers that are small, medium and large," Gerhardt says.

While hardware providers can provide the basic foundation for SS7 functions, operational needs are another story. Many carriers find the prospect of interconnecting with all of the necessary network elements a daunting task.

Localized operators can turn to LECs for regional services. But contracts with additional service providers or a hub provider are needed for national services and for services that allow a telco to differentiate itself from what a LEC is providing.

"Even if a LEC were to provide some services, it typically would not provide them with the breadth of connectivity that a hub provider can," Gerhardt says. For instance, a LEC could provide regional calling name information but not national database information.

Another example is in the area of ISDN user part (ISUP), the out-of-band service used to provide long-distance call setup (Figure 1)."In order to provide that service, you could go to a local exchange carrier and get an ISUP connection to them," Gerhardt says. "But for all the calls you want to make outside of that local exchange, you would need to get either direct connections to all the different LATAs throughout the country or come to a hub provider. So coming to a hub provider is certainly a lower cost but in many cases [also] the only way to get to all those LATAs very quickly."

Another hub provider is Illuminet Holdings, whose early background included providing SS7 services to independent telcos, then long-distance companies and then wireless operators. CLECs now make up 30% of the company's business, although IP carriers are quickly filling up the customer ranks, says Bob Wienski, Illuminet's director of intelligent network (IN) services.

Illuminet operates with a two-tiered architecture that is common to phone companies with their own SS7 networks. Illuminet owns and operates gateway pairs. Independent telcos own eight or nine regional pairs of signal transfer points (STPs), from which Illuminet leases capacity. Illuminet also owns and operates its own regional STPs, which are connected to the gateways and interconnect various customers (Figure 2).

An operator's outsourcing needs change as it matures. Although few new operators have the operations experience, knowledge and technical staff needed to operate an SS7 network, they might overcome some of those hurdles with time.

Wienski uses Illuminet client PrimeCo, now part of Verizon Wireless, as an example. When PrimeCo started, the company turned to Illuminet for things such as national database access, call setup capability with LECs and interexchange carriers and IS-41 roaming with other wireless companies. Illuminet provisioned the link between PrimeCo's mobile switching centers and Illuminet's STPs, thus providing interconnectivity to any entities necessary.

However, as PrimeCo grew, it elected to install its own STPs for intranetwork signaling off its own switch. This move,Wienski says, is common among carriers and can satisfy an operator's desire for more control - whether or not it proves to be more economical. But PrimeCo continued to outsource to Illuminet's hub for interoperability with other carriers, avoiding the cumbersome process required to set up direct links and contracts directly with other operators.

A one-stop signaling shop Convenience also has led other companies to take the SS7 hub route. For instance, Columbia, S.C.-based IDN, owned by 18 independent telephone companies and cooperatives that jointly comprise the South Carolina Telecommunications Group, is a GTE TSI customer.

IDN was launched Sept. 1, 1999, with the goal of providing SS7 and database services to independent CLECs and wireless operators in South Carolina and across the Southeast. Table 1 shows the services that IDN provides to member companies in affiliation with GTE TSI.

General manager Michael Strickland notes that IDN sits on both sides of the SS7 fence. "We do both insourcing and outsourcing," he says."Our member owners have chosen to insource their SS7 services to [IDN]," and IDN in turn outsources services to GTE TSI.

In deciding to outsource, Strickland had two choices." I could try to engage in a strategic alliance with a national hub provider or I could go out on my own and negotiate signaling contracts with all of the national signaling database providers and national carriers," he says."Of course, the latter is a lengthy process, involving possibly two or three years to see that to completion."

IDN uses GTE TSI for 800 database access, calling name service, query response service and LATALink ISUP signaling, Strickland says, allowing IDN to become a "one-stop signaling shop for our member owners." Since early January, IDN has been establishing signaling links from member owners' switches across South Carolina into IDN's STP gateways in Columbia, he adds. "[The operators] have either A or B links up to us, and we have B links established to GTE TSI so we can get national access," he says.

The IP effect Aside from the obvious database needs, there are other compelling reasons for certain operators to outsource IN products.

Many start-up CLECs will merge or get acquired, making outsourcing further attractive for companies so they don't have disparate SS7 platforms when they combine, says Francis Duffy, research director for intelligent networking at Communications Industry Researchers.

Further, new CLECs have advanced IP-based, fiber-based plants, placing them in the "so-called SS8," or softswitch, universe, which is at odds with the time division multiplex-ing-based SS7 network, Duffy says.

Yet even IP-based network operators need to deal with incoming SS7 calls, although that technology "is extraneous to their ultimate IP business plan," Duffy says. Accepting calls from the old SS7 network and transporting content and signaling through IP to the termination point involves a new set of advanced technology platforms such as signaling gateways, media controllers and media gateways. Given that, Duffy says, start-ups that don't outsource their SS7 functions "need to invest in two kinds of technology in one fell swoop."

Large incumbent operators also need to bridge the IP gap through new technology. But with healthy revenue streams of $14 billion per year from enhanced services, the incumbents' war chests are deep enough to buy outright whatever technological solutions are necessary, Duffy says. Those incumbents also are well-positioned to provide outsource services to CLECs and others, though on a regional basis.

The integration of SS7 with IP is changing the services paradigm. Some envision a time when IN access will require only the knowledge of SS7 application layer protocols and access to signaling gateways rather than possession of SS7 hardware."IP is the enabler of the IN because the IP networks are finally separating all control in the service application logic from the underlying switching,"Wienski says.

The burgeoning IP market portends new revenue streams for service bureaus by enabling a new set of communications carriers to emerge. The number of phone companies is expected to double in the next three years, Wienski says, and those new operators will require interconnectivity with other carriers. They also will need protocol translation assistance. One example is in addressing. Phone companies use E.264 NPA and NXX numbers, and IP networks use IP addresses. To route between the two, translations must be made between POTS and IP phone numbers, creating new service opportunities for service bureaus, Wienski says.

"The worlds of IP and IN will converge, and then that hybrid will take on a life of its own," says Art Stoutenburg, product manager for networks at GTE TSI."That's not until the year 2005 and out, so what do you do in the interim when the IP world wants access to IN applications over in the [public network] via SS7?"

Because SS7 infrastructure on the telephony side is embedded, not just domestically but worldwide,"we know that networks [are] not going to disappear, so a hub provider is needed to provide interoperability between the SS7 world and the IP world," Stoutenburg says.

The increased use of softswitches and distributed architectures also present challenges for operators.

"It's going to be very expensive for carriers to change their architecture overnight," so many may look to hub providers in the interim," Stoutenburg says.

The industry is faced with a host of new approaches and protocol proposals such as the transport adapter layer interface (TALI), stream control transmission protocol (SCTP) and IP-S7. Because of the magnitude of scale, hub providers appear better positioned than small and start-up operators to deal with standards committees, implementing the leading protocols and making changes as evolving technology dictates.

Out of house: Out of the question? Even the smallest operators are gaining alternatives to outsourcing. Vendors are rethinking the Class-size switch, and all are looking at various configurations of so-called softswitches, CIR's Duffy says. "Hard switch vendors want to preserve the longevity of their current product lines by repositioning existing equipment with server-based software," he says.

Dave Barclay, product marketing director for intelligent products and services at Lucent Technologies, agrees. "There's a definite trend - we're doing it and others are, too - toward smaller configurations that make the start-up costs less for network operators and to bundle services on a single platform so they're more cost-effective for the smaller player."

For instance, Lucent offers a package that combines call management services such as Internet and voice call waiting along with call screening on a single platform that can bring some CLECs a one-year payback on their investment with as few as 15,000 subscribers. "Our goal is to continue to simplify what it takes to deploy and maintain these services," Barclay adds, noting that is regardless of whether the services themselves are ultimately offered on a wholesale or retail basis.

Some operators appear determined to keep IP services in-house, meaning they won't have to share IP revenue streams with a service bureau. For instance, integrated wired and wireless communications provider D&E Communications in Ephrata, Pa., uses number portability and SS7 gateway services from Illuminet, which in turn leases regional STP services from D&E.

However, D&E has a strong computer networking services group and is looking forward to developing a host of IP-based offerings and integrating them with SS7 services rather than outsourcing them to a hub provider, says Greg Strunk, vice president of network development for D&E.

New sources of outsourcing Nonetheless, continued development of innovative services offer new opportunities for outsourcing.

For instance, mobile location services are becoming a strong focus at GTE TSI, which is offering packaged location content with information content in a quickly deployable service bureau mode. The service will inter-face with any position determination solutions - whether handset-or network-based - chosen by wireless operators. The main selling point for this service is that it can let operators dabble in an untried business with minimal investment, Gerhardt says.

And as long as such new and unproven technologies proliferate, the need for regional, national and international service bureaus likely will grow."The industry is operating from the old telco model where the operator has and owns everything," says GTE TSI's Smith. But just as modern restaurants don't buy and pluck their own chickens and computer manufacturers don't produce their own chips, he explains, the telco industry is learning to outsource its service offerings.

"Some of the folks that wanted to buy and build their entire infrastructure are struggling financially while others that have outsourced commodity items such as SS7 are thriving," he says. "There's a paradigm shift occurring, and it's toward outsourcing."

The implementation of local number portability may give operators headaches, but it means business opportunities for intelligent networking service bureaus.

"Because LNP is a commodity service and something that won't enhance operators' competitive positions, it is especially well-suited to outsourcing," says Rob Smith, SS7 product manager at GTE Telecommunication Services Inc.

The company, which uses a Tekelec Eagle platform for its LNP offering, is touting outsourced LNP as a way to eliminate upfront capital costs. Furthermore, having a single point of access to the entire nationwide LNP database is especially attractive to multiregion operators, in part because the administration costs are considerably less than trying to deal with each of the RBOCs, Smith says.

Critics of full LNP outsourcing caution that an operator that delays implementation of its own LNP solution will miss out on LNP cost recovery that must be conducted within strict time limits.

However, Smith notes that much of the recoverable upfront costs involve supporting the system of eight number portability administration centers (NPACs) and are common across operators, regardless of how they enable LNP. In addition, Smith points out that early outsourcing of LNP will allow network operators to wait for newer - and likely less costly - IP-based technology for their own LNP platforms.

Bob Wienski, Illuminet Holdings' director of IN services, notes that the hub operator entered the number portability market on Oct. 1, 1997, with an application that consists of two service elements.

Yet while some carriers are content to pay by the dip, others want to get a better handle on their monthly costs. To that end, operators might want to deploy their own LNP database but not administer the data that comes from the NPAC and goes to a local service management system, a complicated data management tool that filters LNP data to the service control point.

Illuminet recently sealed a deal licensing Evolving Systems' software, which will enable Illuminet to operate the local service management system (LSMS) and hook it to carriers' owned and operated SCPs for a flat monthly rate. Thus, operators will control routing information but not have to invest in the LSMS. The product is targeted for early fourth quarter commercial availability and toward Tier 1 and Tier 2 providers.