From Softswitch: Architecture for VoIP

Buying Class 4 or Softswitch with Class 4 at $50 Per DS0

The following net present value model is provided to demonstrate net present values when Class 4 vendors drastically lower their prices. This model reflects a sale price of $50 per DS0 for the Class 4 switch. In order to transmit voice over an IP network, the Class 4 switch also requires a VoIP gateway, as detailed in Table 11-30. Table 11-31 shows the operating expenses for Class 4 at $50 per DS0 versus softswitch. Table 11-32 outlines the costs and benefits of buying Class 4 at $50 per DS0 plus a VoIP gateway. The net present value of Class 4 at $50 per DS0 with a VoIP gateway versus softswitch is covered in Table 11-33.

Table 11-30: Cost structure for Class 4 at $50 per DS0 plus a necessary VoIP gateway versus softswitch

Components of cost

Class 4 DMS-250

Softswitch Convergent Networks ISC2000

System

$50/DS0 4,032 + VoIP gateway at $182,000 = $383,600

$225,000

Installation

$15,000

$9,000

Total (P = Co)

$398,000

$234,000

Table 11-31: Operating expenses for Class 4 at $50 per DS0 versus softswitch

Components of cost

Class 4 DMS-250

Softswitch Convergent Networks ISC2000

Collocation rent (annual)

$48,000

$12,000

Labor

$85,000 (engineer)

$70,000 (technician)

Maintenance contract

$38,360

$22,500

IP circuits

$1,080,000

$1,080,000

Total

$1,251,360

$1,239,100

For life (j) of 2 years

$2,502,720

$2,478,200

Table 11-32: Costs and benefits of buying Class 4 at $50 per DS0 plus a VoIP gateway

Income tax component

Class 4

Softswitch

Gross...

Copyright The McGraw-Hill Companies, Inc. 2003 under license agreement with Books24x7

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Cleanrooms
Cleanrooms are contamination-free environments where high-tech manufacturing and assembly take place.
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VoIP and IP telephony allows PC users to make phone calls over the Internet or other packet networks via gateways and standard telephones.
Pressure Sensors
Pressure sensors include all sensors, transducers and elements that produce an electrical signal proportional to pressure or changes in pressure.

Topics of Interest

Net Present Value When Softswitch Generates Greater Revenue According to Laura Thompson, Vice President of Marketing and Channels at softswitch vendor Sylantro (www.sylantro.com), a...

Leasing Class 4 versus Softswitch Table 11-24 details the cost structure with leasing Class 4 and softswitch for 4,032 DS0s. The benefits and costs when leasing Class 4 and softswitch for 4,032 DS0s...

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Large Long-Distance Service Providers The following pages delve into a "carrier-grade" scenario comparing the Net Present Values when planning for 36,000 DS0s in one location. Telco strategy over the...

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