Iristel finds Canadian solution for MTS Allstream

Most carriers understand the advantages of an all-IP network and hope to soon leave behind their legacy TDM systems. However, even having an internal IP network doesn’t help if the new platform has to carry TDM traffic from other carriers.

That’s the problem faced by MTS Allstream, the Winnipeg-based teleco which has an IP network. The solution has been backhauling its international traffic through a foreign city — often New York — where a service provider such as FiberNet converts the traffic from TDM to IP, then ships it north.

But recently MTS turned to a Toronto VoIP services provider, Iristel, to do the conversion. The goal was not only to eliminate the need to backhaul over long distances, thus saving money. In exchange, Iristel hopes it has found a new service to sell Canadian carriers.

“We’ve been doing this type of thing [having a foreign provider do TDM to IP conversion] for three or four years,” said Dave Ballantine, MTS’ senior vice-president for global carrier solutions. It’s a stop-gap measure as the company decides whether it can afford to convert internally its international VoIP traffic.

“While we have a VoIP platform, we’ve been hesitant to manage international hubbing traffic,” he said, “because we use it for a lot of other activity in Canada.”

Although based in Manitoba, MTS is increasingly spreading trolling for customers across the country, and as a result, is seeing a jump in its international voice traffic. Ballantine said that traffic has grown eightfold in the past four years — he estimated it at “billions of minutes” a year — with at most 15 per cent of it pure IP. But the cost of international backhaul was getting high.

MTS has had a working relationship with Iristel, a CLEC (competitive local exchange carrier) whose services include carrying international voice traffic for carriers. It offered to create a made-in- Canada solution.

The answer is a 3U-sized gateway from Iristel that plugs into MTS’s Toronto switching centre which does the conversion, eliminating the out-of the-country backhaul. “This solution is very unique for Canadian CLECs and ILECs because of the interconnectivity here,” said Samer Bishay, Iristel president and CEO.

The design and installation took only about two months he said. What really took the time, Bishay and Ballantine said, was creating policies for potentially disruptive things such as determining which partner would have responsibility for handling particular service problems.

MTS pays Iristel a flat transaction fee based on the minutes it handles. Ballantine is pleased with the in-country service, which began several weeks ago. “When we sign up a new customer we can turn it up in two or three days,” he said. “Before if I had to connect [to a foreign service provider ]at a DS-3 level it was three weeks provisioning.” Outsourcing conversion “was a quicker way to market for us, and it saves us a fair amount of infrastructure,” he said.

One day, he suggested, MTS will do it themselves. But because international voice is “a low margin business,” as long as the price is right, the telco won’t rush into it. Meanwhile Iristel has a new service it will try to sell Canadian carriers.

“What we’re creating is not only a solution but also making the Canadian marketplace more of a hub,” said Bishay. “Instead of having to transit [traffic] in Chicago or NY we can make it right at home and generate cost savings.”

Iain Grant, managing director of the SeaBoard Group, a Montreal-based telcom consultancy, agreed it was a smart move for MTS not to spend money on building its own international connection. “Good for MTS to have found a local partner,” he said in an interview. As for Iristel, he said it might find customers for the service in Canadian cable companies.

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