Is MPLS The New Telephone Network?

The telephone network, as we’ve come to know and love it, is based on incremental improvements to the PSTN or Public Switched Telephone Network. This is a copper and fiber infrastructure that switches circuits to connect analog, cellular and digital phone calls from any party to any other party. Most business phone systems have depended on or mirrored the architecture of the PSTN to connect even their in-house calls. That’s all changing, with various technologies vying to become the next solution for connecting telephone calls.

What’s prompting the change? It’s not wireless. The cellular phone system was designed to be tightly integrated with the PSTN. The earliest cell phones were analog, with TDM and other digital multiplexed protocols following. What hasn’t happened yet is the wholesale transition to packet switched voice on the wireline or wireless phone networks.

Where packet switching, notably VoIP, has flourished is on private telephone networks set up by enterprises for their own use and on connections to the PSTN through the Internet to avoid the phone company local loops.

Why is VoIP such a big deal? More and more businesses are migrating their in-house phone systems to VoIP solutions. Part of the reason is the cost advantage of eliminating the separate phone wiring network in favor of using the corporate LAN to connect computers and telephones. Another reason is to avoid long distance toll charges by interconnecting business locations on a converged voice and data network. A third reason is features. IP telephones are really more like computers than the old desk sets. They can be integrated with business applications to provide things like “screen pops” of customer information based on who is calling.

The migration from circuit switching to packet switching was originally accomplished by replacing the traditional PBX (Private Branch Exchange) with an IP PBX. Think of the PBX as a small version of the PSTN switches that handle massive amounts of public traffic. The PBX resides on your premises and does all your in-house call connections so you don’t have to pay the phone company to make a call from one desk to another. You also need the capacity to make and receive calls with the outside world, so your PBX has to connect to the PSTN through one or more outside lines called trunks.

Trunk lines are bundles of telephone lines. Most businesses need more than one outside line. They may start off with a single analog business line and add more over the years. At some point it makes sense to consolidate all those separate lines into a single digital trunk that can carry up to 24 separate phone conversations.

Just because the trunk lines have been switched from analog to digital, doesn’t mean you are using VoIP. Yes, VoIP telephony is digital, not analog. But the digital protocol used by T1 and PRI digital trunks is time division multiplexed switched circuit, not packet switched IP. With an IP PBX, you can switch to IP telephones in-house and connect your IP PBX to the company LAN so that you don’t have to maintain the separate telephone wiring. Your connections to the outside world will still by the same analog or digital trunk lines to the PSTN.

Where you really cut the cord, so to speak, is when you replace those PSTN trunk lines with something called a SIP Trunk. This is a private line connection between your IP PBX and your telephone service provider. That service provider takes the place of the local telephone company and connects to the PSTN at their end. You can still make all the local and long distance calls you want, but perhaps at a considerable cost savings.

The alternative to the SIP Trunk is the Internet. The Internet connects literally from everywhere to everywhere. It is a massive public infrastructure that economy of scale makes very inexpensive. Connecting from telephone to service provider for residential users is done using the Internet. Many small businesses have also taken this approach to minimize costs.

The tradeoff is that voice quality over the Internet varies quite a bit. It depends on the capacity of your connection plus whatever else is happening on the Internet. Traffic jams called “congestion” can degrade voice quality with distortion and delay. One minute everything sounds great, the next minute the caller sounds garbled. If it gets really bad, the call may be dropped.

Many businesses can’t stand this variability of performance. They want the same quality of phone conversations they had with the PSTN, but with the advanced features and cost savings offered by VoIP. The technical answer has been to use a private line connection between your company and the service provider. These SIP trunks can support multiple conversations, even scaled for hundreds or thousands of simultaneous calls.

The latest development is cloud hosted PBX systems. Cloud computing offers businesses the opportunity to avoid capital investments and maintenance costs in favor of paying by the user by the month to use a cloud based infrastructure. Cloud computing has been extended to include telephone service through a cloud hosted VoIP or cloud hosted PBX system. All of your in-house switching and outside calls are handled through the cloud. You have IP telephones on your premises plus a gateway device that connects through a private line to your cloud service provider.

This is great for single business sites, but does the entire setup have to be replicated at multiple locations?

Yes and no. Yes, you still need your IP phones and gateway at each branch office or other location. However, you can route your calls through the same cloud hosted PBX. Now it becomes more sensible to connect all of your locations to your cloud service provider through a MPLS (Multi-Protocol Label Switching) network rather than pay the cost of a private line for each location.

MPLS networks are privately operated, as opposed to the public Internet, and maintain enough resources to simultaneous support the needs of all of their customers. This includes class of service tagging so that voice calls get the priority they need to maintain call quality. Each location simply needs a last mile connection, such as T1 or Ethernet over Copper, to the very large MPLS network. The network takes care of traffic routing between your locations and your cloud service provider where all the switching takes place.

One excellent example of where this approach is optimized is the XO Hosted PBX service offered by XO Communications. XO is also a network operator, so they can provide both the cloud PBX and the MPLS network to connect your business locations in one optimized system. This gives you one vendor to deal with if problems ever arise.

Sounds a little like the old Bell System, doesn’t it? You deal with a single provider who makes the connections to your phones and does the switching. In this case, you have a choice of vendors and a far richer feature set than offered in the old days of phone monopoly. Today’s cloud hosted PBX systems can include your wireless phones as well as your desk phones so that you only need one telephone number no matter where you are.

MPLS is a likely candidate to become the new telephone network. It supports hundreds or thousands of customers without interference or service degradations. Of course, there needs to be a way to interconnect customers on different networks. This is currently done by routing outside calls through the PSTN. Eventually, Network to Network Interfaces (NNI) may allow larger cloud PBX providers to peer traffic so that most of your calls will be on-net and not subject to toll charges. Even the PSTN may evolve to a very large MPLS network based on VoIP technology, abandoning the analog and TDM legacy technologies that have been the standard for the last century.

Is your company interested in more advanced phone services with potentially large cost savings? If so, get prices and features for enterprise grade VoIP and cloud services now.

Can Hosted Voice Cut Your Phone Costs In Half?

A generation ago, a big cost savings opportunity was switching to a competing long distance telephone service provider. Both businesses and consumers went on a stampede once deregulation opened the door for competitors to the incumbent local phone companies and their lock on long distance prices. The real enabler was making the process all but invisible to the customer. Sure, there was some arcane procedural work involved in having your 1+ calls go to supplier B rather than supplier A. You didn’t have to deal with that. You simply called your new provider, fill out some paperwork or signed up online. The magic happened in a week or two and, suddenly, your long distance bills were lower.

There’s another stampede building right now. It’s the opportunity to move from the in-house phone system with trunk lines to the local telco to cloud hosted telephone services. In a way, what’s happening to local business telephone service is what happened to long distance decades ago. It’s moving to a lower cost model via disruptive technology. What will turn it into a full blown stampede is providers who make the move painless for their customers. Think about it. If you can cut your total phone costs in half without having to go through a gauntlet of technical gymnastics yourself, how can you not make the move?

Megapath, a full-service competitive telecom provider, is doing its best to become your next telephone company as well as your network services vendor. They’re doing this with a comprehensive hosted voice platform that makes it easy to get the phone services you need without YOU having to make the investment, develop the expertise or provide the staffing.

Just what is hosted voice and how can it offer such dramatic cost savings? It’s a matter of economy of scale. Every business can go out and buy a PBX switching system and a truck full of phones, wire all this up and bring in local dial tone with a bunch of POTS lines or an ISDN PRI trunk. Isn’t this pretty much what everyone has done? The alternative is to have a specialized service provider build a much larger switching system and the staff to run it and have companies who are not in the telephone business get their services remotely.

Hosted voice is a lot like website hosting in that instead of you maintaining your own servers, you pay by the month for someone else to provide the servers and the bandwidth that connects them to the internet. With hosted voice, you pay by the month for MegaPath or another hosted voice provider to switch all your in-house, local and long distance phone conversations and provide the telephone trunks that connect to the public phone system.

WIth hosted voice, there is no need to buy or maintain a local PBX phone system. You don’t need to lease any telephone lines. Whatever PSTN (Public Switched Telephone Network) connections you need will be provided. All you need are IP phones connected to your network and a voice gateway that that manages bandwidth to your service provider to ensure that voice quality has priority over other traffic. Capital investments are a thing of the past. You buy phones as you need them and you might even get the phones included free with your service plan.

It might not be immediately obvious that hosted voice with pay-as-you-go pricing has a flexibility that in-house systems lack. There is no need to buy more capacity than you can use right now. If you need 25 phones, then 25 phones and the service to run them is all you order. If you land a new contract and have to start hiring like crazy, then you go ahead and add “seats” to your system as needed. You pay incrementally more each month to match the increase in your business. You don’t go out and buy a big switching system to handle anticipated needs. The hosted voice provider has a system that can accommodate any possible number of phones you’ll ever order. That reserve capacity is something that works to your benefit but you don’t have to pay for.

The days of every company being in the telephone business are about over. The rise of hosted voice systems connected by SIP trunks, basically high bandwidth dedicated lines, enables a new model of telephony where you simply pay for what you need when you need it. Could this approach offer advantages for your company? Get competitive quotes for Hosted Voice Enterprise VoIP Telephony and compare them to your current costs, including what you have to invest in equipment and maintenance. It may be time for you to make the move to a hosted phone system.

Can You Save 50% With Unified Communications?

Have you noticed that your telephone expenses have grown right along with the expansion of your organization? Of course. In fact, they’ve gone up like crazy over the years. Have you seriously questioned why?

Why? Because you have more people on the telephone, of course. That’s the obvious answer, but it may be so obvious that you don’t look further. The fact is that not all telephone charges are created equal. Some are difficult to avoid and a necessary part of doing business. Others can be eliminated through the use of better technology. The technology that works this magic is called unified communications. Let’s take a look at a quick animation that explains everything...



Here are some important points made in the video and how they apply to you. Unified communications is all about merging your voice, data and video networks into one unified network. Many businesses can save money by doing this, even if they are smaller companies and even if they have only one location. Not mentioned is the hosted PBX solution that works especially well for smaller companies that don’t have a large IT staff.

The real cost cutting comes from consolidating the communications across multiple business locations. Some companies grow linearly with optimization every step of the way. Most don’t. If any of your growth has been from mergers and acquisitions, you can be pretty certain that your telephone network is not anywhere close to optimized. That’s probably true to some extent even if all you’ve done is add branch offices.

Why? Because the tendency is to have a phone system at each location. That means a stand-along PBX with trunks to the local phone company and different bills from different providers at each location. Then there’s the matter of communication among locations and back to headquarters. Chances are that this is done by making long distance phone calls and incurring long distance phone charges. Ding-ding-ding. You can just hear those telcos ringing the registers.

What’s better optimized? Moving your voice communications, i.e. telephone calls, from their own individual networks to your main corporate network that interconnects all locations. You need it for data anyway. Why not let voice packets piggyback on the same network?

What happens with this arrangement is that all your internal calls are free of charge. The phone company can’t charge you if you don’t use their network. So, stay off the PSTN (Public Switched Telephone Network) until you absolutely have to use it. That’s for outside calls to other companies or your own customers.

By letting a major competitive carrier, like Level 3, be your network and phone service provider, you can get by with a single IP PBX located somewhere on the network to route outside calls through one set of PSTN trunk lines. Level 3 has the advantage of being licensed as a competitive phone company in all 50 states, so they can get you local numbers wherever you want to establish a presence.

Is it really possible to save 50% of your phone bill by using unified communications? It can be that lucrative. How much can your operation save? Get competitive quotes for unified communications SIP trunking for all your business locations and see just how far your eyes bug out at the answer.