benchmark-it news

Rob Pritchard

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• Publié par: Phyon
• Nombre de lectures: 16
• Langue: English

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benchmark-it.co.uk

benchmarkit news Corporate/MNC Issue 13, 2004

Headlines: AT&T ANNOUNCES GLOBAL VOIP TELEWORK TRIALS •Conducting trials in Asia and Europe for global VoIP telework service to be introduced in 2005; •AT&T not selling IPbased voice services just on cost savings, but on enhanced networking capabilities and functionality. MCI LAUNCHES ONDEMAND APPLICATION SERVICE •Enables businesses to distribute software to multiple locations, helping them to install new releases and updates, as well as better to manage licences. GLOBAL CROSSING ENHANCES CUSTOMER WEB PORTAL •Gets new look and feel, streamlined online ordering and account management tools, improved product performance reporting and simplified ticketing; •Although online service management tools offer customer control and potential cost savings for service providers, they must take care not to lose the human touch that can best understand what a customer thinks, feels and wants. INFONET RELEASES 2004 FULLYEAR RESULTS •Core net services revenues growth of 12% to $620 million is a good performance in a broadly flat market; •The key management challenge amongst service providers at the moment is getting the balance right between cost control and investment for growth. CABLE & WIRELESS LAUNCHES UK IP VOICE SERVICE •IP Voice seen as the “killer application” to drive businesses towards wholesale adoption of IP; •Battle has begun to be perceived as the leading VoIP service provider. ENERGIS REPORTS FULLYEAR RESULTS, FIRST PROFIT •Revenues of £745 million down 3% yearonyear, but Energis is profitable; •The rollercoaster years are over and service providers are now focused on delivering solid financial performances, rather than growth for growth’s sake. TELEGLOBE COMPLETES ITXC ACQUISITION •The combined company is now the thirdlargest carrier of international voice traffic, transporting more than 11 billion minutes a year; •Mobile and IP are the two key growth areas for wholesale players. GLOBAL CROSSING DECOMMISSIONING TDM SWITCHES •Legacy network equipment being superseded by next generation technology; •Like many of its competitors, Global Crossing is positioning itself to be seen as the leader in a new market. With so many service providers jostling for this position, it is possible that a new price war may begin.

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benchmark-it.co.uk AT&T ANNOUNCES GLOBAL VOIP TELEWORK TRIALS AT&T has announced it is conducting trials in Asia and Europe for a global VoIP (Voice over Internet Protocol) telework service, targeted at multinational companies, that it expects to introduce in 2005. The service is designed to allow a business to provide its employees a suite of advanced calling features in the home or hotel environment using readily available broadband connections. Eventually, the service will afford remote workers secure, highspeed connections directly to their corporate offices. The trials are scheduled to begin in the third quarter of this year in Australia, Hong Kong, Singapore and the United Kingdom. The service is built upon the capabilities of AT&T’s CallVantage Service, launched in March of this year and currently being rolledout across the USA. “Today’s announcement signals the industry’s first business VoIPenabled global telework solution using highspeed Internet connectivity.” “Maximizing the value of a global IP networking environment and the productivity and mobility it can provide is one of the top priorities of large enterprises today,” said Cathy Martine, AT&T’s SVP for Internet Telephony, Consumer Marketing and Sales. “If the promise of IP can be harnessed with remotely deployed employees and combined with a robust portfolio of VoIPenabled networking solutions, it will positively influence a business’ Return On Investment model. This in turn should stimulate more demand.” AT&T’s advanced VoIP calling features include: Personal Conferencing, which will make it quick and easy for participants to establish impromptu conference calls with up to ten individuals; Voicemail with eFeatures will allow participants to hear their messages by phone or PC and forward them to anyone in the world via email; Call Logs will allow participants to track and monitor their calling habits or move frequently called numbers into their personal Phone Book for clicktodial access. “Responding to customer demand, AT&T is VoIPenabling its entire business portfolio, providing solutions to companies that are evolving their networks to deliver IPbased services and applications to their own customers, suppliers, employees and partners. AT&T is driving toward seamless internetworking among all the various elements required for IPbased business communications. And AT&T is the only VoIP provider with interoperability agreements with the five leading equipment manufacturers  Alcatel, Avaya, Cisco, Nortel Networks and Siemens  which is critical to delivering integrated solutions. The company is also focused on delivering new business voice applications and services like IPCentrex, call centre applications and Telework solutions. These are especially critical for the rapidly growing international teleworking community. The service provides portability of features and significant cost savings compared to st Issue 13 benchmarkit.co.uk June 21 2004 ©For reproduction rights contact info@benchmarkit.co.uk.rights reserved. benchmarkit.co.uk. All Opinions reflect judgement at the time and are subject to change.

benchmark-it.co.uk making calls from hotels or using mobile roaming service for travelling professionals, affinities and communities that have need to communicate frequently.” “Today’s announcement is the latest in a series of moves by AT&T as it continues to reaffirm its position as a networking leader committed to delivering highvalue, integrated services, solutions and applications for business customers and consumers,” said Martine. “Beginning in 1997, AT&T began actively using VoIP solutions to address the needs of multinational corporations. This early adoption of IP has led the company to its current position as a leading provider of VoIP solutions over its MPLS (Multi Protocol Label Switching)based global network. It delivers these services over any data network including ATM, Frame Relay and IP VPN. AT&T was the first business VoIP service provider to offer voice quality backed by standardsbased service level agreements. The company currently supports hundreds of business VoIP customers and over the last year alone has experienced a fourfold increase in the number of business customers using its VoIP services.” AT&T lists the following amongst its differentiators for “anytoany voice”: •Only global player with longtime experience in voice and data; •Development work from AT&T Labs; •SLA based on R factor and not MOS which is an internal measurement; •VoIP without the high startup cost; •VoIP without the high cost of throwing out legacy PBXs. VoIP offers a range of potential benefits to corporate customers, perhaps the most obvious of which in the short term is cost savings. But AT&T is emphasizing not the cost savings, but the possibilities enabled by the new technology, such as enhanced functionality and customer management, and the faster timetomarket for new applications. MCI LAUNCHES ONDEMAND APPLICATION SERVICE MCI has introduced its OnDemand Application Service, a new managed solution that “helps businesses intelligently distribute software to end users via MCI’s global IP network.” “Delivering on its Convergence Networking strategy, MCI’s new ondemand service addresses the growing challenge businesses face in distributing software to multiple locations and hundreds of users. With this firstofitskind service, companies can now more easily distribute software releases and patch updates, better control software licences and track software usage under a payasyougo model.” “As more companies leverage the power of IP, MCI is using its global IP network in a new way to empower a host of new business capabilities,” said Nancy Gofus, MCI SVP of Product Management “MCI’s OnDemand Application Service is bringing together the power of computing and networking to deliver the benefits of convergence to our customers.” st Issue 13 benchmarkit.co.uk June 21 2004 ©benchmarkit.co.uk. All rights reserved. For reproduction rights contact info@benchmarkit.co.uk. Opinions reflect judgement at the time and are subject to change.

benchmark-it.co.uk “Available immediately, MCI’s new fully managed offering builds on the ‘software asaservice’ concept and helps companies lower total cost of ownership, optimize company resources and improve network utilization. With a simple connection to MCI’s IP network, companies can utilize MCI’s streaming application delivery platform centrally to deploy and locally to execute Windowsbased software. As a result, OnDemand Application Service customers can benefit from several new capabilities, including automated software entitlement, compliance, licence tracking and extensive monitoring, metering and reporting capabilities. Hosted at an MCI data centre and centrally streamed over the company’s global IP network to user desktops, the service enables companies to support corporatewide usage of applications to geographically dispersed users and the extended enterprise, resulting in better performance and faster download rates than more traditional methods. MCI is utilizing the latest technology from Endeavors Technology, a leading provider of ondemand software tools. A key advantage of this service is its extensive licence compliance and usage tracking capabilities that provide businesses with valuable statistical information at the desktop level. With these features, MCI customers can log all usage and check for compliance each time an application is requested using a Webbased interface. This provides the ability to create a software audit of licences in use and to assess users by specific application. Offering customers a new and better way to plan for software purchases, MCI’s OnDemand Application Service also provides strong antipiracy and licence management control features. MCI’s OnDemand Application Service is easily integrated with the company’s other offerings, including its Remote Access, Wide Area Networking, Data Center, Security and Content Delivery services, to deliver a comprehensive communication solution to customers.” MCI continues with its product rollout under the “Convergence Networking” banner, this time offering software distribution and management. The proposition looks appealing to corporate customers, offering them a way to manage upgrades and patches, assuming they actually have control over their entire organisation’s computers. GLOBAL CROSSING ENHANCES CUSTOMER WEB PORTAL Global Crossing has announced a set of enhancements to uCommand, its Webbased global account management tool. uCommand enables carriers, enterprises and small businesses to manage Global Crossing’s complete portfolio of services, including Global Crossing IP VPN Service, Global Crossing VoIP Service and Global Crossing Managed Services. Enhanced features include a new look and feel, streamlined online ordering and account management tools, improved product performance reporting and simplified service ticketing.

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benchmark-it.co.uk “These latest enhancements to our uCommand Web portal demonstrate our commitment to consistently improving our customers’ experience,” said Anthony Christie, Global Crossing’s Chief Marketing Officer. “Through uCommand, our customers are put in the driver’s seat and handed the keys to our carrierclass IP VPN, VoIP and managed services, giving them the network flexibility they need to save time, improve productivity and manage their network more effectively.” “uCommand users can now customize navigation, speeding access to the business critical features they use most often. These include interactive features, such as the ability to redirect traffic conditionally or manually, check account status and information, authorize VPN access via hosted RADIUS server, and communicate directly with Global Crossing customer service 24 hours per day, seven days per week. Enhanced management features include mapbased realtime service status displays, a new eTraffic usage reporting system for voice, and near realtime performance charting for global IP VPN and VoIP services. These latter reports include fine grained Class of Service (CoS) utilization analytics, updated every five minutes. VPN network reports can be viewed online or exported conveniently in Microsoft Excel spreadsheet format.” More than 50,000 end users in North America, Europe, Latin America and Asia use uCommand. The Web portal is built on Microsoft’s .Net framework and is used more than 2.5 million times per month. With most service providers offering similar products based on similar technologies to a list of locations that covers the majority of customers’ needs, it is often difficult to identify ways in which to differentiate propositions. Frequently it comes down to aggressive pricing (which is the toughest longterm strategy). In order to command a premium, or to retain customers that might be tempted elsewhere, service providers are looking to offer enhanced customer service, and on line portals have become a given as part of the overall customer service proposition. They ideally should mean that customers get to monitor their networks, and increasingly applications, in near realtime, as well as being able to perform management tasks from their PC. This, theoretically, gives customers better control and simultaneously cuts costs for the service provider. Any wise player would re invest those cost savings into developing their sales and marketing capability in order better to understand both the broader market developments and the specific issues pertaining to each individual customer. The danger is that the temptation to save money previously invested in the human customer relationship will end up with the mutual flow of information and knowledge between customer and service provider being reduced. INFONET RELEASES 2004 FULLYEAR RESULTS Global valueadded services provider Infonet has released its results for fiscal 2004, highlights include:

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benchmark-it.co.uk •Core net services revenue grew 12% to $620.0 million (from $552.5 million in 2003): Network services: $335.6m ($321.7m); o Consulting, integration and provisioning services: $227.8m ($184.4m); o Applications services: $40.6m ($22.0m); o Other communications services: $16.1m ($24.4m); o •Net loss of $66.6 million; •Cash and equivalents: $393.6 million ($429m); •Q4 EBITDA: $11.2 million ($4.5m in Q4 2003). “Results for the fiscal year show that our net services revenue  during a difficult telecom environment  have continued to grow,” commented José Collazo, CEO of Infonet. “Our EBITDA is growing substantially and we believe that we continue to be on the way to becoming a profitable, cashgenerating company. We’ve been successful in adverse economic conditions because we’ve executed our overall strategy effectively. That is, we’ve continued to focus on reducing costs, but not at the expense of customer service or new service innovation. Trends that have influenced our business continue: multinationals continue to avail themselves of new sources of labour and forge into new markets. Chief Information Officers are budgetconscious, but an increasing portion of tech budgets is going toward the implementation of networkbased business processes designed to make corporations more competitive. While pricing pressures remain in our business space, we’ve shown that we can navigate through tough times. And while the cost of provisioning the last mile as a percent of our revenues has never been higher, our programme to reduce the growth of these costs has begun to show in our quarterly trends. During the year we continued to expand our services so that we are wellpositioned for the future. We’ve enhanced our security services and our managed extranet services. Our mobility services are ready for the new wave of wireless data applications. We continue to believe that growth will come from the convergence of voice, video and data. While developing new services helps to ensure a healthy revenue stream, we cannot expect the upcoming year to be bountiful enough  in and of itself  to bring us to profitability. We’ll reach our profitability targets through revenue growth and controlling our expenses. Expense reduction trends in our network and administrative costs are positively impacting the bottom line and our actions to reduce local access expenses are well under way. Our net services revenue growth at Infonet USA at 19% is most gratifying given that this is one of the world’s most competitive telecom markets. Our success in the U.S. demonstrates that our products and services are well positioned and well received by multinationals. We are also experiencing strong growth in other key countries in Europe and are now working to extend that revenue growth to markets across Europe.

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benchmark-it.co.uk We expect to continue to have no less than $350 million in cash, cash equivalents and shortterm investments in the bank. We continue to expect that cash flow from operations will exceed our capital expenditure needs starting in late fiscal 2005 and that we will be profitable after taxes starting late in fiscal 2006. And while we’ve forecast another year not unlike the last, recent trends are heartening. However, we don’t expect a huge increase in tech spending and half of our business comes from Europe, where the economic turnaround has yet to materialize. So we’ve based our targets on a year very similar to fiscal 2004  10% growth in our net services revenue, substantial growth in EBITDA and capital expenditures at about 10% of total revenue.” Infonet appears to be getting the balance right between costcutting and developing new products that will win new business or substitute existing revenue streams – this is the key management challenge amongst service providers addressing the MNC segment. Continued growth at 10% per annum in a market that is essentially flat is a good performance. CABLE & WIRELESS LAUNCHES UK IP VOICE SERVICE Cable & Wireless has confirmed that it is to announce “the first ever offtheshelf Internet Protocol (IP) Voice service for UK businesses at the Enterprise Networks th th event on 5 and 6 July at Olympia, London.” “Called Cable & Wireless IP Voice, this important industry first will allow business customers to realise the benefits of a converged network by combining their existing telephony systems with the latest IP technology in a single infrastructure. Cable & Wireless is a UK market leader in businessclass IP telephony and VoIP services where organisations have replaced their private automatic branch exchanges (PABXs) with IP serverbased infrastructures linked by Internet Protocol Virtual Private Network with Quality of Service (IPVPN QoS) networks. In addition, Cable & Wireless has significant experience in the area of complex voice virtual private networks (VPNs) and managed private branch exchange (PBX) services for the larger multisite business customer. Organisations now want the best of both worlds by having a mechanism seamlessly to integrate both networks. Cable & Wireless will provide this capability with its new IP Voice service, specifically designed to link the new IP world and existing voice world.” Cable & Wireless UK CEO Royston Hoggarth said: “We are delighted to be the first to market in the UK with a managed IP voice service for business customers. IP Voice expands upon our current, successful IP telephony solution as we deliver the integrated platform for data, IP and voice services that our business clients are increasingly demanding. Voice will be the killer application to drive UK businesses towards wholesale adoption of IP. For businesses already using IPVPN QoS, the next step in their journey to an integrated communications infrastructure is to migrate their voice networks to IP.” st Issue 13 benchmarkit.co.uk June 21 2004 ©benchmarkit.co.uk. All rights reserved. For reproduction rights contact info@benchmarkit.co.uk. Opinions reflect judgement at the time and are subject to change.

benchmark-it.co.uk “Many organisations already derive significant value from the use of sophisticated voice VPN services, for example, by using centralised operators and distributed call centres. Organisations want to retain this value without having to have a separate voice VPN  they want the best of both worlds. Cable & Wireless IP Voice achieves this with the following clear benefits for UK businesses: •Network and infrastructure cost savings: Cable & Wireless IP Voice enables organisations to replace separate o voice and data VPNs with a single IP network without losing any voice functionality. The service supports all private voice protocols commonly used in businesses today, so that companies can leverage their existing telecoms infrastructure while planning their migration to IP. Analogue handsets can be reused and Local Area Network (LAN) upgrades can take place incrementally; A combined infrastructure for voice, video and data can reduce the o network to a single access circuit per site; Customers can move away from sitebased equipment and consolidate o network applications centrally, achieving hardware and management efficiencies; •Business flexibility: Organisations can now migrate each site on their new combined o network to IP enabled PBXs or full IP telephony at the pace that suits them to provide the maximum functional and financial benefits; The ability to access calls from a wide range of devices at any point on o the network increases the opportunities for flexible, remote working and hotdesking, making it simple to move or change offices; •Productivity improvements: Customers will have the capability to distribute call centre agents o across their organisation, to integrate the company’s dial plan with the corporate directory and to move towards videoconferencing and unified messaging as standard desktop services for all employees.” Any corporate customer that hasn’t heard the acronym VoIP this year must have been hiding in a very deep, dark cave. For the last couple of years every service provider has been trying to position themselves as the natural choice for IP VPNs, now it is VoIP that is taking the centre stage. Talk of voice being a “killer application” is highly amusing after years of having data and “eeverything” shoved down our throats, but the essential message that voice is just another application, albeit one that requires extra attention, is right. Cable & Wireless has also got it right when it talks about the real business benefits of VoIP and when it tries to demystify it. The battle has commenced… ENERGIS REPORTS FULLYEAR RESULTS, FIRST PROFIT Alternative UK operator Energis has released its results for the financial year ended st 31 March 2004, with the following highlights: st Issue 13 benchmarkit.co.uk June 21 2004 ©benchmarkit.co.uk. All For reproduction rights contact info@benchmarkit.co.uk.rights reserved. Opinions reflect judgement at the time and are subject to change.

benchmark-it.co.uk •Revenues of £745 million (€1.13bn); •First ever profit, with earnings before interest and tax of £10 million; •EBITDA up 21% to £125 million; •Revenue from core products up 9%; •Over £300 million of contract wins from target customers. £ millions 2003 2004 Revenue 770 745 Contribution margin 37% 43% EBITDA 103 125 Cash balance 150 171 Archie Norman, Chairman of Energis, said: “Today, Energis is fullyfunded, profitable and generating cash. We have delivered our first ever profit. This is a milestone in the Energis journey and a clear sign that we are building a strong and commercially robust business.” John Pluthero, CEO, added: “From a standing start, we have forged a strongly performing business. This year we will see a return to growth driven by our existing products. The opening up of broadband will provide further growth in 2005 and beyond. A strong product set, a clear market focus and 1,700 talented people with only one ambition  to improve the customer’s experience. It’s a recipe I like.” “During the last 12 months, Energis has made progress creating a financially strong business focused on serving marketleading organisations. Energis has now completed the first phase in its journey and has built a secure longterm platform for future growth. Revenue for the year was £745 million, a 3% decline yearonyear driven by a marketplace refocus on generating higher quality revenue from fewer, larger customers. Overall, revenue last year from core products grew by 9% and the more favourable product mix delivered a 6 percentage point increase in contribution margin from 37% to 43%. This refocus has seen the directlyserved customer base reduce from 4,000 to less than 2,000 and the product set rationalised. Full year free cash flow of £66 million was £60 million ahead of last year. This was despite a 43% increase in capital expenditure due to significant investment in infrastructure for key customers and in the core network. Energis is set for a return to growth with over £300 million of contract wins and opportunities opening in broadband, local loop unbundling and IP convergence.” Energis is a perfect example of the rollercoaster rise that has been experienced by many service providers over recent years, and alternative service providers in particular. The early highs of being the stock market darlings and rapid revenue growth drove many to pursue aggressive plans to take over if not the world, then large parts of it. Boom turned to bust, managements got changed, workforces got slashed

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benchmark-it.co.uk and common sense returned to strategy development – the new mantra was to focus on a target segment or two and cut the corporate cloth to suit the prevailing market. Fortunately, growth appears to be returning to some national markets for services to corporates as a result of new products such as broadband, IP and mobility services, which in turn is helping alternative carriers and incumbents alike escape revenue stagnation. The exciting times may be over, but that may be no bad thing (and who knows what the future may yet hold?) TELEGLOBE COMPLETES ITXC ACQUISITION Teleglobe has completed its acquisition of ITXC, whose global Voice over IP (VoIP) network has enabled the company “to become a leading international voice carrier.” “The acquisition significantly enhances Teleglobe’s voice services capabilities while complementing its strong position in Data, IP and Global Roaming services. Teleglobe is now the thirdlargest carrier of international voice traffic, transporting more than 11 billion minutes per year (Telegeography 2003). A management team experienced both in telecom and in corporate reengineering plans to develop the combined strength of the two companies.” Liam Strong remains President and CEO of the combined Teleglobe. Tom Evslin, founder and CEO of ITXC is the company’s nonexecutive chairman of the board. Strong commented: “This combination of the two companies will allow Teleglobe to deliver a wide range of innovative and valueadded services to our carrier customers. These services will exploit the increasingly rapid adoption of VoIP technology and enable us to be at the leading edge of the industry curve. The acquisition broadens and deepens the customer base and the international termination footprint of the combined companies, and also provides proven VoIP technology leadership within the industry while providing customers and suppliers with more flexible, scalable, and costeffective network interconnections and call transport.” “Teleglobe is the only major carrier whose business is entirely wholesale and dedicated to enabling the retail services offerings of international, local and regional mobile and fixed carriers. Our operation is structured with the exclusive aim to provide international services that help established and emerging carriers and ISPs to expand and grow,” commented Strong. “Teleglobe is targeting carriers and ISPs in three service categories: •Voice  international voice services to and from any corner of the world, and valueadded voice services such as international tollfree calling. Fixed and mobile retail service providers get the benefit of a global voice network built upon over 250 direct and bilateral relations with national carriers, supplemented by hundreds of commercial carrier connections. The integration of ITXC’s network adds the capabilities of advanced VoIP technology for quality services at the lowest costs and highest flexibility. The combination

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benchmark-it.co.uk allows Teleglobe to address a wider range of market segments within the voice business; •Data  global IP transit, international private leased circuits (IPLCs), bandwidth capacity, and broadcast services. Teleglobe is a Tier 1 Internet service provider (ISP) with multiple highcapacity peering arrangements with other Tier 1 ISPs. The MPLSenabled IP network connects more than 90 countries to the Internet and will carry IPv6 , the new generation IP protocol; •Mobile Signaling  services including mobile global roaming for voice and text messaging.” “Carriers now have even more compelling reasons to partner with Teleglobe,” added Strong. “Our wholesale international services are essential building blocks for carriers to raise network flexibility, lower network costs, deliver more valueadded services and expand their retail market penetration. They can depend on Teleglobe to help them compete.” Teleglobe occupies an interesting niche position, targeting the highly competitive wholesale segment. The ITXC acquisition makes sense as the two growth areas in this segment are mobile and IP – developing (or buying) a marketleading position is key as economies of scale are essential for success in wholesale. GLOBAL CROSSING DECOMMISSIONING TDM SWITCHES Global Crossing has announced that it has nearly completed decommissioning the first legacy timedivision multiplexing (TDM) switch in the core of its network in response to steadily increasing usage of its Voice over Internet Protocol (VoIP) network. By taking this step, Global Crossing expects to create optimum network efficiencies in its core multiprotocol label switching (MPLS) network, while continuing to deliver carrier and enterprise customers reliable, IP voice services. “As a leader in IPenabled services, we are one of the first telecommunications providers to decommission a legacy voice switch in favour of nextgeneration VoIP technology,” said John Legere, Global Crossing’s CEO. “By migrating more of our traffic onto our VoIP network, we can further enhance our customers’ experience while supporting continued growth in voice traffic.” “This is a significant accomplishment that paves the way for future TDM/VoIP traffic migration,” added Dan Enright, Global Crossing’s EVP of operations. “This initiative aligns directly with our overarching goal of providing all our voice applications over our IP backbone, while still offering complete interoperability at the core and edge of our VoIP network.” “Global Crossing took on this project as VoIP traffic traversing on its private backbone grew to 2.4 billion minutes each month, or approximately 40% of its total voice traffic. Global Crossing’s VoIP network is fully interoperable with its TDM backbone and enables carriers and enterprises to transition to a fullyconverged allIP voice network environment over a single connection at their own pace, without having to invest in expensive network equipment or infrastructure.

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