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Summary

“Get bigger and get better, or get out” has long been the mantra of Ovum’s wholesale analysts in reference to the international voice market. Deutsche Telekom ICSS demonstrated its commitment to the former with the introduction of its Dynamic Voice Exchange (DVX) in October 2015, while Spark New Zealand became the latest communications service provider to pull out of the market when it sold its international voice business to the MNF Group at the beginning of June 2016.

Innovation the catalyst for international voice success

By international voice standards, the international arm of Spark, Telecom New Zealand International (TNZI), had a tiny business, carrying just 2.8 billion minutes in 2015 and selling services in six countries. By contrast, Ovum now estimates that more than 20 billion minutes are needed to compete in the international voice business. The growth of a few major global players is making it increasingly difficult for national and regional CSPs to compete for business or even deliver international services to their own customers cost-effectively.

TNZI’s voice business has been sold to VoIP wholesale specialist MNF Group. This is surprising as the business has not been sold or outsourced to one of the global giants – BICS, BT, DT ICSS, iBasis, Tata Communications, or Vodafone – nor to a regional leader such as Telstra. However, it does reinforce the message that those interested in growing international voice businesses are increasingly innovative.

Huge scale and slick efficiency are prerequisites for any company that views international voice as a revenue opportunity, but that alone is not enough. The once-anticipated growth from outsourcing following Tata Communications’ deal to carry BT’s off-net traffic never materialized, and international wholesalers must find new ways to encourage smaller CSPs to use them for international voice services. Getting bigger and better now requires international wholesalers to create voice platforms that provide CSPs with greater flexibility and control over their international voice traffic. DT ICSS’s Dynamic Voice Exchange is the latest example of this.

DVX combines a simple registration process to access DT ICSS’s international voice network with a pay-as-you-go model enabled by RTX’s marketplace platform. As a result, connecting to the platform takes days, not weeks or months, and upfront CSP payments are held in their own RTX account, not that of the supplier. That means any CSP has control over its funds at all times. Furthermore, DT ICSS has enabled a feature that allows customers to route traffic simultaneously to premium and standard routes, providing greater flexibility and differentiation capabilities for CSPs to offer to their customers.

DT ICSS’s DVX is the latest in a series of voice developments by international wholesalers. Others include Voice Business Apps by Tata Communications, which topped Ovum’s 2013 analysis of wholesale innovations, and a new voice platform by Vodafone Carrier Services in 2015. The international voice market is incredibly competitive, and the major players are responding with innovations to meet the evermore exacting requirements of the market.

Appendix

Further reading

“VCS drives profitable new revenue from voice and SMS,” TE012-000564 (December 2015)

2015 Trends to Watch: Wholesale Telecoms, TE0012-000530 (January 2015)

Wholesale Innovation Analyzer 2013, TE012-000499 (June 2014)

The Future of International Wholesale Voice, TE012-000317 (November 2011)

Author

Catherine Haslam, Senior Analyst, Telecoms Wholesale

catherine.haslam@ovum.com

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