TABLE OF CONTENTS The converging market demands greater flexibility in switching equipment. In order to take advantage of market opportunities, a service operator must be able to enter and exit markets with a degree of ease. This chapter will detail how softswitch is cheaper to purchase and operate (in terms of rental space and power draw) and is smaller in footprint (size and shape) than Class 4 or 5. The low cost of Voice over IP (VoIP) technology and operations relative to legacy circuit switches is one reason why softswitch can be considered a disruptive technology.
The reasons for the success of VoIP gateway switches in the long-distance bypass market were that the switches were cheaper and smaller, thus enabling service providers to enter and exit markets with relative ease. Leasing a transpacific Internet Protocol (IP) circuit was much cheaper than leasing a point-to-point Time Division Multiplexing (TDM) circuit. For approximately a $100,000 investment (assuming the operator bought the equipment outright), a long-distance bypass operator could compete (though not to scale) with mainstream service providers such as AT&T and Cable and Wireless. Bypass is defined as the provision of telephone service without using the local exchange or toll network of a regulated telephone utility. [1] In this case, the operators were bypassing the International Message Telephone System (IMTS), which is largely circuit-switched and not regulated by any one government. Rather it is largely governed by a set of...
