What do you think about carriers offering interconnect platform management services?

Ooh. Okay. This is an interesting topic for me. I have seen repeated instances of it and it kind of makes me scratch my head. The idea behind this is that a carrier that is proficient in interconnect voice offers to perform some, most, or even all of the interconnect voice operations for a carrier and charge them just a “small” per minute or per month management fee. Heck, we have even seen some scenarios where carriers are offering this service free and looking to make up the margin on actual voice traffic. All sounds great, right? What could go wrong?

First, it’s a very appealing solution to the complexity of interconnect voice. What doesn’t sound good about it? You get a carrier to take on the cost of interconnect voice operations, and you get to eliminate the overhead, reduce opex, and, simplify your back-office operations. It takes the headache of interconnect voice and, in theory, eliminates them. Sign me up.

Unfortunately, as the saying goes, the proof is in the pudding. From large telcos such as TATA, or other carriers such as Bankai Group or BTS, carriers have chased this pretty hard. You know what the market response has been so far? Meh.

Why? First of all, if you are a carrier, and in the voice space, being competent in voice is usually a requirement. So, carriers who experiment with this option aren’t doing so because they can’t - it’s mostly in pursuit of a cost reduction. Reducing the overhead and operating cost of interconnect voice operations is an attractive, albeit elusive, goal. So, carriers explore it, but they do so because of a cost driver not because of an inability. That creates a disconnect.  Carriers who offer “outsourced” interconnect voice operations are trying to highlight their proficiency and expertise, but they are confusing their tools with their knowledge. Their knowledge is replicable and most carriers feel that they either have the domain expertise in house or can get it. The tools are what they need. And once you recognize that, then it becomes a question of which provider offers the best tool set.

Then, the conclusions come quickly and pretty obvious. Carriers are NOT software companies. They aren’t organized like software companies and therefore don’t manage the development and support of their tools like software companies. By definition, they are not meant for broad distribution. That’s why there is a marketplace where solution vendors, like GCS (and our competitors), exist and thrive. We provide a value proposition that is our tool set and we run our company like a software company, not a carrier. And those businesses are entirely different.

So, what do I think about carriers offering their interconnect management platform as a service to their carrier peers?  I think it’s a nice idea that just hasn’t worked in reality.  

See ya,