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[QUOTE]Originally posted by corndo: [QB] Since ICMH used India in their PR as an example of the “type” of switch I think it would be good to clarify why switch typing is important. Please see below and notice the segmentation and potential (inherent) profit that can come from “our” new switch. Telecom reform is redefining the distinctions between international long-distance (ILD), national long distance (NLD), and local long distance (intra-LATA LD in the United States), forcing carriers to revise business models and equipment vendors to adapt product lines. While many similarities exist between telecom reforms in various countries, it is the differences that lead to the complexities in segmenting markets and requirements for Class 4 LD equipment. The entry of distance-insensitive, softswitch-based Class 4 solutions further adds to this dynamic. In many respects, the same Class 4 softswitch deployed in Delhi to manage ILD traffic can be used to manage NLD services-not just between Delhi and Mumbai, but also between Calcutta and Chennai. However, from a regulatory view this can only be done if the ILD carrier building the POP in Delhi has an NLD license. Long-distance telephony: A tale of two countries To better understand the LD market segmentation, it helps to divide countries into two segments: 1. Countries that have well-defined and stable laws governing ILD, NLD and local services; and 2. Countries that have interpretable, provisional and dynamic laws governing ILD, NLD and local services (as well as dynamic competitive landscapes). According to Newton's Telecom Dictionary (17th Edition), long distance is defined as: "Any telephone call to a location outside the local calling area. Also called a toll call or a trunk call." In all cases, LD calls are trunk calls, while toll calls may be local or LD calls. In addition, "local calling areas" are defined differently in different countries. ILD is easily defined as calls that terminate outside the country from which the call originated. Likewise, local services are defined, at least partially, as calls that are originated directly by (or terminated directly to) a residential, business or public phone end customer. It is the call "legs" in the middle that are hard to define. Generally speaking, this requires geographic demarcations, such as "circles" in India, or local access and transport areas (LATAs) in the United States. India is divided into 21 circles. The United States is divided into 196 LATAs that, in turn, are subdivided into area codes. Thus, one can speak precisely in terms of intra-circle vs. inter-circle calling in India, and of intra-LATA vs. inter-LATA in the United States. In India, NLD is one and the same as inter-circle calling. India as Type 1 example India is an example of Type 1, a country that has distinct laws and licenses for ILD and NLD. India has started the process of privatizing VSNL, the state owned ILD monopoly, and opened ILD to competition on April 1, 2002. Leaving the state-owned NLD monopoly (BSNL) intact, India opened NLD to competition two years ago. (In return, also in 2000, BSNL was permitted to provide local service in all areas except Mumbai and Delhi.) Inter-circle calling legs are the exact domain and limits of NLD. In 1994, India opened local services (called basic services and delivered by basic service operators, or BSOs) to competition, allowing one licensed competitive BSO per "circle" in addition to the government-owned incumbent. In January 2001, India opened basic service to unfettered competition in all 21 circles. Intra-circle calling legs belong to the domain of basic services. United States as Type 2 example (Quick history lesson on how everything got messed up in the first place) The United States has interpretable, provisional and dynamic laws with respect to inter-LATA, intra-LATA and local services. Moreover, the United States does not have an overarching policy on NLD. In the United States, specific companies are allowed (or forbidden) to participate in inter-LATA, or intra-LATA or both, in addition to being allowed to participate in ILD, or local or both. Laws governing inter-LATA vs. intra-LATA have been interpreted and tested ever since the AT&T divestiture in 1984 and with renewed intensity since the issues were re-opened under the Telecommunications Act of 1996. Before 1984, AT&T had a near monopoly on telephone service. AT&T, with its 22 Bell operating companies, sold local, interstate long-distance and international long-distance services. Under divestiture, AT&T was expressly prohibited from offering intra-LATA ("local" long-distance) calls. Although rules varied by state, AT&T's competitors (such as MCI and Sprint) have always been allowed to offer intra-LATA calls. RBOCs were expressly prohibited from offering inter-LATA services. ( We called them Baby Bells rememberJ) The courts assigned nearly all of the Class 4 switches in the United States (in those days, mostly AT&T's 4ESSs) to AT&T and the Class 5 switches (mostly 5ESSs)--including the tandem switches that immediately tied the 5ESSs together--to the seven newly formed RBOCs. While AT&T needed to retain the 4ESSs for ILD and inter-LATA long-distance services, it also fought to keep the 4ESSs because they were key to AT&T's lucrative business services, such as software-defined networks, known today as voice virtual private networks. In these services, the 4ESSs connected directly to small private branch switches called PBXs (sold at the time by AT&T) belonging to the business customers themselves. In other words, at least in business services, the 4ESS Class 4 switches enabled AT&T to preserve the full range of distance-from international calls to calls around the block. Moreover, this is a classic example of how Class 4 switch features, carriers' business models and telecom reforms often play hand-in-hand. In order to provide intra-LATA services, the RBOCs and independent local exchange carriers (LECs) deployed new Class 4 LATA-tandem switches, sometimes referred to as access tandem switches. This is when the LECs invented the marketing term "local long distance" for their intra-LATA services (a market in which they competed with non-AT&T IXCs), to distinguish them from the inter-LATA services that they were forbidden to provide. One result of divestiture was a "resegmentation" in the Class 4 switch market, spurring a significant increase in Class 4 switch sales. As the switch requirements changed, competition took hold, and new vendors like Summa Four (acquired in the early 1990s by Cisco) and Excel (acquired in the late 1990s by Lucent) began to capture market share. The Telecommunications Act of 1996 allows IXCs to offer intra-LATA as well as local services. In return, the incumbent local exchange carriers (ILECs), most of them originally part of AT&T, were permitted to offer inter-LATA services provided they comply with a checklist of requirements. Segmentation of markets and product requirements for Class 4 softswitches Why would anyone want to sort through all of this? The answer is simple: The segmentation of requirements for Class 4 switches--the switching systems used for ILD, NLD (in India, inter-circle), inter-LATA, intra-circle and intra-LATA--must be understood within the context of the segmentation of long-distance markets. In order to segment a market, one needs to understand the customers (carriers)--who they are, what drives them and how your product can address the challenges they face. In the U.S. market, the NLD customer is a moving target. Actually, the targets are not only moving, they are wrestling with each other! This is hardly surprising given the magnitude of the LD and local markets (each roughly U.S.$100 billion per year) up for grabs. [/QB][/QUOTE]
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