TDM Replacement: Skip the Network, Embrace the Cloud

There was an interesting article yesterday in Light Reading about a new TDM replacement (to VoIP migration) solution from a next-gen voice vendor. It features financing, new equipment purchases, and a decade-long commitment to maintenance and support. One of its central tenets is the cost savings from power and real estate.

Yes, moving to VoIP means lower OPEX, smaller equipment, and energy savings. However, we think the true way for cost savings is not to build a next-generation network at all.

The article noted that there is no financial risk for the vendor; but there is for the service provider, even with a low-cost loan. Given the price pressure of voice, subscriber churn, and questions around regulatory environments, coupled with demands all things broadband and data, why tie up significant CAPEX and internal resources on rebuilding a voice network? Even after the network is deployed, there is ongoing OPEX that will eat at gross margins. The business case is murky for that endeavor.

Instead of building a voice network, cloud sourcing the network using cloud voice platforms is the smart way forward. The cloud and SaaS model promises:

  • More space/environment savings (no VoIP boxes whatsoever!)
  • More CAPEX for other initiatives (more money to spend on broadband, WiFi, LTE, etc.)
  • OPEX that aligns with revenues and customer base (no lopsided business case or multi-year ROI)
  • Internal resources and staff that can be focused on high ROI projects

We absolutely believe that voice is essential and is imperative to bundle with broadband. But we think service providers should ditch the boxes and cloud source VoIP instead.

Read more in our white paper Cloud Phones: 9 Transformative Benefits for Service Providers

TDM Replacement