The Prepaid Press - December 15, 2007 - (Page 18)

TELECOM & TECHNOLOGY December 15 · 2007 - 18 THE STATE OF PREPAID TECHNOLOGY by Ken Osowski ‘Tis the Season… in terms of bandwidth-based solutions, will the wholesale unit of measure evolve to be something other than minutes, and if so what? On the plus side, payphone service providers considering various TDM-to-IP migration strategies got the beginnings of a boost in 2007 with the ﬁrst availabilities of true telco-grade IP open source/open access service creation & delivery technologies. Until ’07, open source/ open access was one of those hot button trends that just didn’t seem to ﬁt in prepaid. This is due, in part, to the fact that early technologies were almost exclusively skewed towards IP-PBX and basic, small-scale enterprise applications, and in part to the fact that ﬁrst gen solutions demanded extraordinary levels of programming and network protocol expertise from would-be users. Newer object-based technologies and developer resources are simplifying service creation and customization, and eliminate, or sharply simplify, the knowledge barriers that typiﬁed ﬁrst gen solutions. As a result, these new solutions enable economical IP-based prepaid market entry/migration and service expansion. One key factor remains the same however: like ﬁrst gen open source technologies, new telecom developer communities also monetize their technologies down the road, upon deployment. Their main benefit is to help de-risk and cost-reduce entry and migration initiatives -- while there’s no free lunch, think of open source/open access as a sort of free appetizer to get your business or migration up and running. 2007 also saw a substantial growth in the worldwide number of IP routes coming online. This expanded opportunity by enabling service executives to customize and broaden their service products, and consider meaningful quality and price differentiators. In addition to transport-layer issues and impending decisions, 2007 also saw increasing levels of sophistication among the minute-pirates and scammers that have long-plagued the prepaid industry. In essence, louses (looters of unsuspecting service executives) with access to enhanced platforms are spooﬁng ANIs (the Automatic Number Identiﬁcation that identiﬁes the calling subscriber’s phone number), and Newer object-based technologies and developer resources are simplifying service creation and customization, and eliminate, or sharply simplify, the knowledge barriers that typiﬁed ﬁrst gen solutions. threw a barrage of calls at prepaid service provider networks to see which ANIs stick. When the louse found ANIs identifying prepaid cards with values associated with them – signiﬁed by a “Hello, where do you want to call?” response – they’d either take (ie, steal) the card’s value immediately or add the subscriber’s number to their list for a future larger-scale plundering. 2007 saw minutes generators and service providers begin to detect and address this issue; 2008 may well see a more organized multi-national approach to prevention and prosecution. 2008 will also see new service expansions, opportunities and market fluctuations. We’re here to help keep you ahead of the curve, and will continue to address your concerns and questions at keno@pactolus.com. In the meantime, we wish you happy holidays and a prosperous New Year! Ken Osowski is the VP of Marketing & Product Management at Pactolus Communications Software. He can be reached at Keno@pactolus.com. With the season’s change here and the year winding down, it’s time to look back on some of the events that deﬁned prepaid telecom in 2007, and look ahead to some of the trends that are likely to help shape 2008. 2007 saw the beginning of a significant market shift that’s going to escalate in ‘08, according to the executives and analysts who spoke at the November “New Market Peering Summit” sponsored by pulvermedia, creators of the popular VON show (Voice on the Net). The Summit’s speakers and industry pundits brought into sharp focus the end-of-life-ing of legacy audio bridges & programmable overlay switches that began in earnest in 2007. Experts universally agreed that, by and large, telecom service executives who’ve based their businesses on TDM equipment and connectivity are for the immediate future, able to leverage the ‘long tail of obsolescence,’ where their business model doesn’t change but the market steadily moves beyond it. For prepaid service providers, the immediate business impact is to embrace IP voice transport for more economic termination costs that improve profitability and competitiveness, The overall transition cycle will be a lengthy one, but its effects will begin to be felt in 2008 as cost structures for TDM connections fail to keep pace with more economical IP connectivity. thus making the long tail far shorter than in other telecom service markets. Many payphone service providers already see this coming: they realize that, at some point, trafﬁc will switch from TDM to IP transparently, accelerating the demise of end-of-life products. The overall transition cycle will be a lengthy one, but its effects will begin to be felt in 2008 as cost structures for TDM connections fail to keep pace with more economical IP connectivity. The clearinghouses for transport minutes govern both how payphone service providers buy terminations, and their costs. Most clearinghouses are subservient to the tier 1 carriers, and increasingly to the emerging carriers who are enthusiastically adopting SIP peering as their foundation. In both market sectors, call signaling is shifting: the call functions fulﬁlled by the SS7 standard are now being replicated in standard SIP. In fact, SIP is beginning to emerge as the core signaling mechanism. So, except for the Tier 1 carriers, who will continue to support that long TDM obsolescence tail using converged media gateways and Class 5 switches, voice trafﬁc, both wholesale and retail, will steadily rise using IP networks and components. Even Class 4 soft switches are going away, and are increasingly being replaced by Session Border Controllers (SBCs). No matter what you deploy, this cycle of obsolescence is likely to affect everyone in 2008 as the lowest wholesale cost points help redeﬁne the competitive landscape. The network is changing and what is now the parallel market (IP) will ultimately become the primary market… 2008 will see this trend accelerate. Pulvermedia’s Carl Ford posed some challenging, forward-looking questions to the service providers among the New Market Peering Summit attendees, including some that can directly impact payphone service providers as we look ahead to 2008: 1 Has the price of voice stabilized to the point where costs could go up? If so, then does that herald the potential for a market for minute futures? And if not, has keep cost billing made the role of a clearinghouse more difﬁcult? 2 Given that the industry’s assets are measured T&T in Brief China Voice Holding Corporation (CHVC)’s U.S. subsidiary, Phone House, Inc., has launched the new GEO prepaid calling cards in California for Locus Telecommunications. The new $5 card will be introduced in ﬁfty states simultaneously. Phone House has been distributing Locus products for over 5 years. Locus supplies some of Phone House’s most popular prepaid calling cards, including the “Aye Caramba!” card, which they say is very popular in Southern California. CHVC - www.chvc.com Locus Telecommunications www.locustelecom.com News Magazine. According to the Telco Homies, the Homies PhoneCards bring an entertainment factor to the prepaid phone card. They include images of characters created by Homies creator David Gonzalez, and each PhoneCard utilizes one or more characters in a real life scene. On the back of each card, there is a background history to familiarize customers with the characters. Telco Homies LLC - www.homiesphonecards.com Titan Global Holdings, Inc. has appointed prepaid industry veteran Brad Kropf as the new President and Chief Executive Ofﬁcer of Titan Communications Division. Prior to joining Titan, Kropf served in leadership roles with Sprint Nextel Corporation. Most recently, Kropf served as Director of Sprint Nextel’s Prepaid Solutions Group, which was responsible for both the retail and promotional sales of prepaid stored-value solutions. Kropf led all divisional functions including sales, marketing, product, operations, card production, logistics, strategic planning, and business development for the Prepaid Solutions Group. Titan Global Holdings www.titanglobalholdings.com Homies PhoneCards, provided by Telco Homies, LLC, recently won the Best New Product of the Year Award from Convenience Store VoluBill has signed an agreement to purchase assets relating to the Dynamic Charging Platform (DCP) product business from Intec Telecom Systems PLC. DCP is a real time charging and billing platform, with over 30 active customers globally. The DCP capabilities are complementary to VoluBill’s existing Deep Packet Inspection (DPI) and control technology and existing charging capabilities. The combination will enable VoluBill to offer a more comprehensive “network to revenue” charging and control solution to Fixed and Mobile operators for any IP/NGN based service. VoluBill will offer a single solution that has a solid footing in the network and which provides the full suite of charging functions such as advanced rating, balance management, bundling, discounting and customer self care. VoluBill – www.volubill.com http://www.chvc.com http://www.locustelecom.com http://www.homiesphonecards.com http://www.titanglobalholdings.com http://www.volubill.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - December 15, 2007

The Prepaid Press - December 15, 2007 GENERAL PREPAID 2007: Prepaid in Review New Prepaid Association? Contents A Funny Thing Happened on the Way to the Forum Regulatory Rundown: FCC Enforcement, SEC Cracks Down, VoIP Hacking, & Wireless Regulation The Legal Line WIRELESS Prepaid Wireless Roundup kajeet to Offer Horoscopes, Jokes and Trivia Redknee Extends Converged Billing Solution AT&T GoPhone Offers Roaming Option in Mexico Total Call Mobile Introduces Holiday Bonus Wireless in Brief INTERNATIONAL Spot Rates Keycorp to Distribute Hypercom in Canada International in Brief Mobile Communications in Latin America Gets a Leg Up TELECOM & TECHNOLOGY T&T in Brief Phone House Launches New Card Facebook Goes Mobile CVT and Total Call Settle IDT Lawsuit Wireline Capex Grows 7% in Third Quarter PAYMENTS Transcard Selected for Discover Payroll Cards Vesdia and MXT Card Services Form Alliance The Giving Tree Card Gives Back MasterCard Launches Prepaid Travel Card Payments in Brief 7-Eleven Pushes Video Games Capital One and NetSpend Merger Off i2c Launches New Release of Campaign Manager Prepaid Card Dispensing from ATMs Credit Card Design Competition Begins NRF Says Gift Cards Gaining Popularity EXTRAS Classifieds Contact Us Our Advertisers

The Prepaid Press - December 15, 2007

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