Customer Profile

iBasis

Global Carrier Delivers Toll-Quality International Voice Services over the Internet

Background

In 1996, while other companies were questioning whether the Internet could ever reliably provide the same level of service as traditional phone networks, iBasis (NASDAQ: IBAS) was hard at work making toll-quality international Internet telephony a reality. It was a road that many traditional carriers doubted would lead to success. Of course, that was before many of them became iBasis customers.

Today, iBasis provides outsourced voice-over-IP (VoIP) services to more than 150 wireless and wireline carriers worldwide, and has a run rate of more than 2 billion minutes of international VoIP traffic per year, making it one of the world's 15 largest carriers of international traffic. The company's customers include many of the largest carriers in the world, such as AT&T, Cable & Wireless, China Mobile, China Unicom, NTT, Sprint, Telecom Argentina, Telefonica, Telenor, Telstra, and WorldCom.

A member of the Cisco Service Carrier Community, iBasis achieves its technological and business goals with a Cisco Transit solution comprising Cisco gateways, gatekeepers, switches, routers, and related Internet telephony equipment in facilities around the world. The carrier extends its advantage with proprietary technology called Assured Quality Routing^™ that is used to monitor Internet-based voice and fax traffic from a global network operations center to ensure quality of service (QoS).

The Challenge: Building a Tier-One, Carrier-Grade Network for VoIP

To successfully deliver international Internet telephony, iBasis needed to deploy a tier-one, carrier-grade quality network for VoIP.

"We knew that all voice and data traffic would one day go IP," says Gordon VanderBrug, iBasis executive vice president. "IP is more robust than the circuit-switched network, accommodates application development and deployment, and is more efficient for transporting international traffic."

iBasis realized that using the Internet as its infrastructure would also facilitate delivery of new, revenue-generating services. In fact, the carrier has recently expanded its service portfolio to offer enhanced voice services that it hosts and sells directly to carriers and enterprises. These services include e-commerce, customer service, and contact center applications that employ speech recognition.

"We look for voice services that have traction from a business perspective, and that can be delivered over our network as IP services," says Ofer Gneezy, iBasis CEO.

Choosing Cisco for Its Technology and Commitment to Partnership

When evaluating partners, iBasis knew it wanted more than a typical client-vendor relationship. "We wanted a two-way street where we had a say in the future direction of the technology, and they had a share in our success," says VanderBrug. "Basically, we wanted a partner that would go to market with us."

iBasis evaluated potential partners' technologies carefully because routing phone calls over the Internet poses special challenges. Foremost is voice quality. "We needed the best gateway on the market to ensure crystal-clear voice transmission," says VanderBrug. Scalability and reliability were other attributes iBasis considered essential to a full-service network. "Once you prove that you can deliver quality service, these big carriers want to know that you can grow your network quickly to support the millions of minutes of traffic they will send your way," says VanderBrug.

After evaluating several companies, iBasis chose to form an alliance with market leader Cisco.

"Cisco has the best equipment, a strong position in the marketplace, and superior VoIP technology," says VanderBrug. "Above all, Cisco has the most experience in deploying packet networks and a real commitment to service providers as evidenced by its Cisco Powered Network Program and other efforts. In addition, because the field is so new, it was imperative that we team up with a company willing to invest in the research and development necessary to continually enhance the technology. Again, Cisco came out on top."

The Cisco Transit Solution: AS5000 Family of Voice Gateways

The Cisco Transit solution has helped iBasis grow into one of the world's largest VoIP companies. In addition, the company has become one of the world's largest international service providers with a Cisco Powered Network designation for Internet Telephony (Figure 1).

The Cisco Powered Network designation tells potential customers that The iBasis Network^™ is built end to end with Cisco products and technologies, and meets a high standard of reliability and performance. The designation is especially attractive to businesses that have built their own internal networks with Cisco equipment—business that already know and trust Cisco products.

The iBasis network has more than 620 Points of Presence (POPs) worldwide, including large carrier-class switching facilities called Internet Central Offices (ICOs) and smaller Internet Branch Office (IBO) facilities—the equivalent of PoPs—located in more than 80 countries.

Central to The iBasis Network is the Cisco AS5000 family of voice gateways. These feature-rich VoIP devices allow iBasis to rapidly introduce and deploy revenue-generating voice services. A Cisco AS5300 Voice Gateway in an iBasis Internet central office (ICO) or Internet branch office (IBO) facility—both equivalents of a POP—interconnects an existing public wireless or wireline telephone network with the Internet (Figure 2). This high-quality network and iBasis' expert VoIP engineering ensures customers are unaware that a voice call on The iBasis Network is actually traveling over the public Internet rather than over a traditional phone network.

The iBasis Network is a Tier 1, carrier-grade-quality network for VoIP, fax over IP (FoIP), and other enhanced voice services. The company's IP-based network accommodates application development and deployment, and provides more efficient transport for international voice and fax traffic.

The Cisco AS5000 family of voice gateways is designed for ICO environments and offers enhanced support for voice communications in all types of conditions throughout the world, an important consideration for iBasis. For example, the Cisco AS5000 family supports a range of interconnect capacities, from four T1/E1 interfaces up to four T3s, in a variety of 1-, 2-, and 14-rack unit (RU) chassis. The Cisco AS5000 family meets iBasis' stringent quality requirements, having achieved the highest scores for voice quality in a variety of third-party tests. In addition, the flexibility of the Cisco AS5000 family to operate in diverse line conditions—combined with iBasis' own Assured Quality Routing^™ (AQR^™) technology—allows iBasis to offer service-level agreements (SLAs) that guarantee call-completion rates equal to or better than those of the Public Switched Telephone Network (PSTN).

iBasis Services

iBasis takes advantage of its end-to-end Cisco network to offer the following services:

International Voice and Fax over IP: When an end-user places a phone call, the user's carrier routes the call to an iBasis IBO or ICO, which converts the call into IP packets carrying the voice information. The packets are then sent over the Internet through a carrier-class connection to an industrial-strength Internet service provider (ISP), such as UUNET, and reassembled at the iBasis ICO or IBO closest to the call's destination.

The reassembled message is then routed over the destination country's local wired or wireless phone network to the call's recipient. All Internet routes and packets are monitored using the company's proprietary AQR technology, which helps detect and correct routing in response to Internet congestion or other problems that could result in call degradation. If a potential problem is detected, the call is rerouted to the destination via the PSTN or back-up leased IP lines. By vigilantly monitoring its global routes and integrating the Cisco Transit solution into its own iBasis AQR technology, iBasis generally routes its carriers' voice and fax traffic over the Internet more than 90 percent of the time.

Speech Solutions: In February 2001, iBasis acquired PriceInteractive, a speech application service provider (ASP) with more than 10 years' experience in developing and deploying carrier-grade customer-care solutions. Now known as iBasis Speech Solutions, this business develops and hosts complex, voice-enabled customer care solutions for enterprise and carrier customers, including AT&T, Exxon, Mobil, H&R Block, Home Shopping Network, Verizon, and Western Union. iBasis customer service solutions incorporate the latest interactive voice response (IVR) technologies and capabilities, including Automatic Speech Recognition (ASR), Text-to-Speech (TTS), and Touch Tone.

Benefits: New Revenue Sources for iBasis and Its Customers

iBasis services are attracting more customers and more revenues— both for iBasis and its carrier customers. These customers can reach markets and gain new revenue sources more quickly by connecting to iBasis' voice, fax, and speech-enabled customer service solutions. iBasis customers also enjoy the benefits of superior quality support services, such as billing, an instant worldwide footprint, continuous innovation, and unsurpassed VoIP expertise. iBasis' commitment to excellence was recently rewarded with a #1 ranking in an industry survey as the best overall international wholesale carrier¹.

The scalability of its Cisco Transit solution allows iBasis to accommodate more customers, more minutes, and more services. The company has also achieved significant marketshare on a number of its routes and carries about 20 percent of all the U.S. voice traffic to Argentina, China, and Russia. Its membership in the Cisco Service Carrier Community—which helps VoIP-based service providers establish network-to-network peering relationships and application alliances—enables iBasis to find originating and terminating service providers worldwide through its searchable member database.

iBasis is growing rapidly, a result of the company's drive, determination, and innovative engineering based on using best-of-breed products and services from Cisco and its Ecosystems Partners.

The Future: Continued Cisco Partnership

iBasis plans to respond to the growing demand for its services by enhancing the performance, capacity, and efficiency of its infrastructure with new Cisco packet telephony products.

"Our strategic decision to form an alliance with Cisco is one of the best decisions we've made," says VanderBrug. "It's a mutually beneficial relationship. We give Cisco feedback on its drawing-board technology and, in return, get early access to emerging products and services. Through the Cisco Powered Network program, we've benefited from opportunities to work with Cisco enterprise customers. It's a win-win situation: when we land a big customer, so does Cisco, because we expand our network with Cisco products.

"The alliance with Cisco has helped us grow tremendously," VanderBrug says, "but I believe that we have still only seen the tip of the iceberg. The IP-based voice services market is wide open, and we look forward to facing new challenges and achieving new successes with Cisco as our partner."

Find Out More

Cisco Transit solutions provide the quality that service providers need to deliver voice services locally or around the world. To find out more about Cisco Transit solutions, visit
http://www.cisco.com/go/telephony.

iBasis is listed in both the Russell 2000 and Russell 3000 Indexes. The company can be reached at its worldwide headquarters in Burlington, Mass., USA at 781 505-7500 or on the Internet at www.ibasis.com.