XConnect Overview

XConnect – overview
Founded: 2005 Overview
Headquarters: London, UK
XConnect Global Networks provides secure, managed ENUM Registries and SIP-based multilateral
Employees: 51 peering services which enable seamless routing between VoIP, NGN, IMS, mobile and legacy
networks.
Key locations: USA, Japan,
South Africa, Israel Key services include:
UC Federations: Registry technology supporting complex video/UC interworking.
Main Investors: Crescent Point
National Federations: In-country ENUM-based Federations enabling service providers (SPs) to
Grazia Equity exchange voice and multimedia sessions on a national basis.
Key technology partners
Global Alliance: Global ENUM-based peering Federation, enabling service providers to
exchange voice and multimedia (eg. HD voice and video) sessions globally.

 Registry voice: Terminates carrier wholesale traffic to a global Registry of telephone numbers.

Key management Market Growth:

li Katz: CEO and Founder VoIP subs penetration to increase Unified communications market
from 30% in 2009 to 45% in 2014. growth forecast.
m

350 45% 16

b
$
eil Cohen: Director of Finance
)

)
(
300 40% 14
35% 12
250
30%

P
V
a
n
e
p
o
avid Schwartz: CTO 10

r
t
I
i
200 25%
8
150 20%
G
P
V
e
u
a
b
o

6
s

15%
ohn Wilkinson: Global Director of Sales and
(
I
l

100
4
10%
Products 50
5% 2

0 0% 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2015
yer Luknar: Director of Information Technology VoIP subs VoIP penetration
SOURCE: Forrester, 2009 Market Overview: Sizing Unified Communications. Forrester
predicts that the worldwide market for UC will be growing from $1.7b in 2008 to $14.5b by
SOURCE: Infonetics historical, Goldman Sachs Research forward estimates 2015 (36% CAGR). Grey bars are implied by the CAGR growth.
onnen Slasky: Director of Operations and Product
Development
Board members Strategy: Notable awards
nrique Garcia-Ayesta: VP, EMEA
 Eli Katz: CEO and Founder - Executive
 John Wilkinson: Global Director of Sales and
Products - Executive Synergistic growth from Leverage and Expand Product innovation for
 Ohad Finkelstein: Chairman of the Board a global multi – + XConnect world-leading + new segments (HD
-Independent Federation strategy ENUM Registry voice, video and UC)
 Dr. Paul Reynolds: (Chief executive Director
Telecom New Zealand) - Independent
Ranked 5th
 Dr. Torsten G. Kreindl: (Board member and Selected flagship customers (130 customers)
Chairman of the Finance Committee of
Swisscom) Grazia Equity
 David Hand: Crescent Point

2

XConnect is the global IP Federation market leader
Overview:
There is an ongoing explosion of multimedia IP communications including IP voice, HD voice,
video and UC.
IP networks are usually connected via the legacy PSTN which is inefficient, costly and does not
support new IP multimedia communication services.

IP Federations are:
A suite of ENUM Registry and interconnect services.
Increasingly replacing PSTN transit, enabling the mass market adoption of new services through
cross-network end-to-end IP multimedia communications.

XConnect operates and enables the world’s largest number of Federations, across all segments,
Global and National as well as UC Enterprise and video.

3

XConnect delivers a new Federation paradigm
BEFORE
VoIP end-users Interconnection between various operators (multi hop PSTN) Terminating parties
Current VoIP interconnect paradigm

PC

Standard phone PC

IP Network
IP Phone
IP Phone

Multi hop PSTN
Smartphone Standard mobile Smartphone

* Multimedia IP communications services are not supported by the standard
multi hop PSTN paradigm

AFTER
IP communications end-users Multimedia hub-based interconnect and ENUM Registry Terminating parties

*
All encompassing Federation paradigm

PC PC
IP Video com. Standard phone
IP Video com.
*
IP Network

IP Phone IP Phone
IM
Standard mobile
IM

*
Smartphone Telepresence

Smartphone Telepresence

4

Patented proprietary technology
XConnect’s core platform including the ENUM Registry and interconnect (IPX) hub systems is based on patented, market-leading and proprietary technology.
The XConnect secure and carrier-grade platform addresses all the key challenges of IP Federation services with fully configurable advanced
peer-by-peer policy control.

Unique, XConnect developed, multimedia and
XConnect patented and developed ENUM Advanced services to support video Federation
multi-protocol interconnect (IPX) hub platform
Registry and Directory technology, with and complex device, network and protocol
with support for H323, SIP and XMPP/Jingle
advanced Policy Control, Routing and Security. interworking.
across voice, HD voice and video.

ENUM Multimedia,
Registries Multi-protocol
(DNS for Interconnection
Telephone Numbers)
(IPX) Hub

Security & Identity Advanced
Reporting &
Management Services Support
Settlement

5

Various market forces driving XConnect growth
VoIP MVoIP Web 2.0 Video IM HD voice

Drivers

Mass market
consumer
services LTE

Enterprise/ SBCs
metro Fibre
Enablers

Enablers
Next Generation Vendors and
Access (NGA) “Multimedia hub- technology
based interconnect”
UC/SIP
FTTC/H
platforms

IMS
Enterprise services

Drivers

Video Tele-
UC IP-PBXs IM HD voice
conf. presence

6

Growth from a global multi – Federation strategy
XConnect’s strategy is to create and operate multiple Federations across a global footprint

National International

 95% of all voice minutes are domestic / national
 The 5% of minutes reflecting International Traffic
traffic.
represents 400b minutes, and $13b of value
 XConnect National Federation services, in a (Telegeography, 2009).
growing number of countries, deliver domestic
 XConnect offers the Global Alliance service for
interconnect services (VoIP and other new
international traffic, delivered through its global
services), with specific national requirements
PoPs.
including private IP networks.

New IP services UC/Enterprise

 Enterprise or UC Peering enables cross-Enterprise
 Providing specialised Federations for HD voice and calling (voice, video, UC) operated by vendors of
video, including additional features and new PBXs/UC platforms.
segment of operators, eg. managed Enterprise
video providers, as well as consumer and business  This will be a major revolution and migration of
video. traffic towards Enterprise Federations.

 All XConnect services incorporate the capability for  XConnect is the first to be offering UC
IP-based services such as video. Federations, including telepresence and video
calling.

The network effect

All XConnect Federations are interconnected to each other, creating substantial growth across the entire customer base.
Reed’s law states that the value of interconnecting N networks is 2 ^ N.

7

VoIP adoption is well underway and growing

VoIP subs penetration to increase from 30% in 2009 to 45% in 2014 Global consumer MVoIP traffic, 2010–2015

25
350 45%

(Petabytes per month)
VoIP penetration
Global VoIP subs base (m)

300 40%
= 16% 35%
20
14E
250
10- 30% 46%
GR =
CA 15 15E
200 25% 10-
GR
20% CA
150
= 49% 10
10E 15%
100 05-
GR 10%
CA 5
50
5%
0 0% 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2010 2011 2012 2013 2014 2015
VoIP subs VoIP penetration
Mobile

SOURCE: Infonetics historical, Goldman Sachs Research forward estimates SOURCE: Cisco VNI, 2011

VoIP penetration of non-cable fixed lines Comments
Netherlands 40%
France 32%
Skype S-1 filing:
Norway 29% “According to industry sources, the worldwide telecommunications services
Sweden 19% market, which includes traditional fixed voice, mobile voice, internet-based
Germany 10% voice known as Voice-over-Internet Protocol (VoIP), broadband and other fixed
Italy 8% data and mobile data, was $1.5t in 2009. According to industry sources, the
Belgium 5% size of the IP-based voice services market, in which we participate, was $41b
Spain 4% in 2009 and grew at a 34% compound annual growth rate from 2006 to 2009.”
Portugal 2% Significant growth opportunities
UK 0%
Switzerland 0% TeleGeography:
Austria 0% “VoIP has developed from a tool for facilitating international interconnection rate
arbitrage into an uncontroversial technology, widely used by incumbent and
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% startup carriers alike. Indeed, a growing number of wholesale carriers no longer
distinguish between VoIP and TDM routes in their rate sheets, focusing instead
A number of countries remain under penetrated in Europe, leaving on price and quality of service metrics. International VoIP traffic has grown from
significant up-side for growth less than 10m minutes in 1997 to 103b minutes in 2009”.
SOURCE: Company data, national regulators, Credit Suisse estimates

8

Cross-platform IP video is at the cusp of an explosion

Global consumer Internet fixed video com. traffic 2010–2015(1) Global consumer Internet mobile video com. traffic, 2010–2015(1)

(Petabytes per month) (Petabytes per month)
1,800 120
1,600
100
1,400 %
= 40
1,200 5E 80
R 10-1 = 90%
1,000 CAG 5E
800
60
R 10-1
CA G
600 40
400
20
200
0 0
2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015
Fixed Mobile
SOURCE: Cisco VNI, 2011 SOURCE: Cisco VNI, 2011

Consumer video communication players Comments

Hardware vendor Service providers
CEO Mark Zuckerberg was quoted saying “with the explosion of social media,
billions of people will be on Facebook and other sites. So the next five years will
Providers

be all about adding apps and other features to users to allow them to connect in
new ways.”

Bill Gates was quoted saying “The idea of video conferencing is going to get so
much better than it is today. Skype actually does get a fair bit of revenue.”
Service

XConnect is uniquely positioned to deliver interconnect services for next
generation consumer communication services (video, IM, UC, OTT, etc.). The
current IP PSTN interconnect paradigm cannot handle these services.
(1) Figures do not take into account the recent Facebook/Skype partnerships that overnight bolsters
Skype’s video user base from c. 150m to c. 750m subscribers.

9

With Enterprise communications also growing rapidly

Unified communications market growth forecast Enterprise video conferencing and telepresence

16 6
($b)

($b)
14
5 0%
12 -15 E=2
6% R 11
=3 4 CA G
10 1 5E
08-
GR
8 CA 3
6
2
4
2 1

0 0
2008 2009 2010 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
SOURCE: Forrester, 2009 Market Overview: Sizing Unified Communications. Forrester SOURCE: Infonetics research, Enterprise telepresence and Video Conferencing
predicts that the worldwide market for UC will be growing from $1.7b in 2008 to $14.5b by quarterly market size, share and forecasts, March 2011
2015 (36% CAGR). Grey bars are implied by the CAGR growth.

Worldwide IP-PBX market, projected revenue growth Comments

7,000  telepresence predicted to be a $5b market by 2015 (Infonetics).
($m)

 Market adoption predictions by Gartner(1):
6,500 6%
=
-14E  By 2016, more than 80% of telepresence meetings will include a
R 10
6,000
CA G participant from a personal video device.
 By year-end 2015, 60% of Enterprises will provide 30% of their users
5,500 with cloud voice services.
 The IP-PBX market is growing strong and will be cannibalising existing TDM-
5,000 based PBX services quite rapidly. This will be a large driver for SIP trunking
proliferation, which ultimately is a core driver for XConnect’s growth .
4,500
2010 2011 2012 2013 2014

SOURCE: Dell’Oro, Barclays Capital Estimates (1) Gartner, Predicts 2011: Adoption of Unified Communications creates
new sourcing and deployment challenges

10

National Federations

Overview Key service features

Situation/Opportunity  For partners:
 Increasing VoIP adoption globally means that  the service includes full management, policy
National operators require an in-country control and operation of the Federation service
interconnect point to enable cross-network IP traffic. including reporting, rating and billing services.
 Emerging trend of shift from per minute revenue  For service providers:
business model for SP’s to service-based revenues.
 National and international peering enabling lower
Mass adoption of services requires cross-network IP
cost, increased quality multimedia features .
interconnection.
 National Federations are deployed with an in-  Support for new IP services e.g. HD voice and
country XConnect hub either sold directly or via video.
neutral infrastructure providers. (e.g. datacentre  Flexible settlement models and policy control.
providers, Internet Exchanges, etc.).
 Number Portability correction.
Solution:
 SuperQuery – interworking with other global
 National Federations, typically involve National
Registries e.g. GSMA PathFinder.
infrastructure providers, who partner with XConnect
to offer a range of local interconnect services to SPs.
 National Federations are deployed with an in-
country XConnect hub and ENUM Registry to enable
National interconnect for operators.

11

Case study - South African National Federation
Company Description Challenges
 Provides wholesale wireless network solutions  Deregulation of market to break monopolistic
to meet the communication needs of operators/ control of incumbent operators.
SPs throughout Africa.  Enabling SME’s to become regulated
 Focuses on supplying products in solution operators in their local area.
format, supported by a wide range of  Cost of investing in own infrastructure to run
supporting services. telecoms business as a barrier to entry.
 Multisource provides wireless solutions as an  High termination charges by incumbents
alternative to fixed line connectivity through meant new entrants could not compete.
stable, long term, reliable partnerships, cost  Diversifying and enhancing the business to
effectively and efficiently. consolidate market leadership.

Solution Platform structure

Summary:
 Deployment of National Federation service
including ENUM Registry and multimedia
interconnection hub in partnership with
Multisource to Service Providers/operators
in South Africa.
 Fully managed hosted soft switch solution to
enable new entrants to set up VoIP
operations without the associated costs and
technical complexities including full back
office operations.

Features include:
 Multi-lateral peering via interconnection hub
enabled new SPs to interconnect directly
and bypassing incumbents.

12

Case study – German National Federation
 DE-CIX provides direct and settlement-free IP  Diverse and complex regionalised market
interconnection ("peering") IX infrastructure with no central interconnect hub for NGN
services to all types of ISPs including and VoIP traffic, meaning SP’s reliant on
broadband providers, content delivery inefficient bi-lateral interconnects
networks, web hosters, and incumbent  Increased demand from SP’s for cross
operators network IP services such as video and HD
 DE-CIX is the World’s leading IX with over 450 Voice
customers from 52 countries  De-centralised number portability system
 DE-CIX is strictly carrier neutral and is owned  Increasing revenue & differentiating services
by the eco association - the World’s largest to maintain market leading position and
non-profit association for the Internet industry. increase revenue from new service offerings


Summary:
 Deployment of National Federation service
including ENUM Registry and multimedia
interconnection hub in partnership with DE-
CIX to Service Providers/operators Germany

Features include:
 Multi-lateral peering via interconnection hub
enabling SPs to interconnect directly and
bypassing incumbents.
 Central number-management and number-
portability platform for operators, facilitating
ENUM-based number discovery and routing
that will enable calls to be delivered
accurately and directly across networks.

13

Case studies – National Federations HD voice
Companies Overview Challenges

 HD voice represents a new generation of  Most HD voice services are limited to within
high quality voice providing more effective the service providers’ network, essentially
voice communication. creating “HD voice Islands”.
 HD voice is currently being deployed by  Interworking issues due to different codec for
hosted IP/PBX providers as a service HD being deployed, fixed SP’s using G722,
differentiator. wireless using AMR-WB, OTT service
 providers using Silk, iSAC and other codecs.
Wireless providers are deploying HD voice to
improve cellular call quality.  Mass adoption of HD voice requires cross
 network interconnection with the option of
Conferencing providers can offer better audio
transcoding between codecs.
conferencing services by implementing HD.

Solution and Benefits Platform structure

Summary:
 Deployed the world’s first HD voice
Federation. HD voice calls are routed directly
between end-points bypassing the PSTN.
 Enables cross network HD voice calling
between fixed and mobile networks.
Federation Features:
 Numbering and routing management via
ENUM local query to ensure that call
avoids the PSTN.
 SIP signalling.
 Policy driven, secure and scalable.
 Media transcoding G722 to AMR-WB
(fixed/mobile).
 Interworking to GSMA Pathfinder and IPXs.
 Joined by 8 US voice and conferencing SPs
at launch.
 Now 11 operators in total including 4
European operators.

14

Global Alliance


Situation/Opportunity:  Hosted virtual interconnect management.
Current PSTN legacy interconnect model is inefficient,  Support for multimedia HD voice, video including
costly and does not support IP services. Video Interconnection Exchange (VIE) – supporting
complex video interworking.
Operators require scalable platforms for international IP
interconnect.  Policy-based private peering.
 Flexible settlement models.
Direct bilateral interconnect is inefficient, non scalable,
resource and capital intensive.  Source of new revenue for Service Providers to collect
per minute fees on inbound calls.
Solution:  Number Portability corrected routing.
Global Alliance enables SPs to multilaterally interconnect  SuperQuery: interworking with other global Registries
utilising ENUM Registry and Federation hub: e.g. GSMA PathFinder.
 Securely routes traffic between NGN and VoIP  Private and public IP network access.
networks.
 Simplify the process of interoperability and
interconnection between networks.
 launch of new multimedia IP services on a cross
network basis choosing flexible commercial and
settlement models.

15

Case study – Global Alliance

 Telio is a leading European provider of access-  Incumbent operator interconnection regime
independent broadband telephone services. based on PSTN meaning IP end-to-end not
 Telio’s mission is to be a major force in defining supported and also charging transit fees,
and providing fixed and mobile internet resulting in higher costs for Telio.
communications to the consumer and small  Required platform for international IP
business. interconnection to strategic destinations.
 In 2008 Telio became the second largest fixed  Required support for new video service to
line telephone provider in Norway. enable availability on a cross-network basis.
 Listed on the Oslo Stock Exchange
(ticker:TELIO).


Summary:
 Global Alliance for international
interconnection, giving Telio access to over
100 SPs globally.

Features include:
 National interconnection via National
Federation. Exchange voice traffic directly
on IP, bypassing incumbent and PSTN.
 Video interconnection to other video
networks managed via Video
Interconnection Exchange (VIE).

16

Registry voice


Situation/Opportunity:  Focussed on core XConnect Federation
Cost of termination across the carrier wholesale destinations, not general global A to Z routing.
market is reducing. Carriers need cost efficient  Customers access the termination service by
termination to remain competitive and maximise ‘dipping’ against the ENUM Registry, either using
margins. an ENUM or H323 query, or via the use of a SIP
XConnect focuses on Registry and NP destinations redirect.
where TN termination costs are highly variable, e.g.  NP correction is provided both with XConnect
US, UK and Canada. routing capability, and is exposed for the
Tier 1 customers include KDDI, IDT, AT&T, Sparkle, customer’s own routing.
BICS and Tata.
 XConnect use Federation members to terminate
Solution: these Registry calls, therefore providing customers
The Registry enables wholesale carriers to terminate with a new revenue source.
calls directly to the terminating Service Providers'
networks.
Routing at granular telephone numbers (TN) level,
rather than traditional country and area code, enables
efficient direct routing, decreasing transit costs and
increasing quality as opposed to legacy IP/TDM
conversion.

17

UC Federations (Enterprise and video)

Situation/Opportunity:  Directory to identify end-user reachability.
Rapid growth in the deployment of Enterprise IP-PBX and
UC platforms. Explosion in video calling and conferencing  Registry to enable inter domain, policy-based, intelligent
across consumer and Enterprise segments including web, routing of video calls, authorization and permission-
mobile, desktop and Telepresence. based end-user communities.
Current market is highly fragmented with multi-vendor,
multi-platform and multi-network solutions, creating  Interconnect for multiplatform protocol working.
islands of service. Multiple signalling protocols including SIP, H323 and
These islands require interconnection to enable XMPP/Jingle.
ubiquitous service availability.
 XConnect Registry (and Directory) technology to enable
Solution:
video interworking of B2B video services supporting
XConnect licenses technology to operators and vendors ENUM, SIP and H323 queries.
for them to create UC and video Federations including
Registry, Directory and interconnect technology.  Enables direct, secure, next generation communication
XConnect addresses the interoperability challenge across between Enterprises: voice, video, IM/Presence and
multiple protocols, codecs, networks and devices. collaboration.

 Enables interworking between existing Enterprise
Federations, XConnect Federations and Registries
including access to other global Registry services such as
GSMA PathFinder.

18

Industry recognised technology partners

19

Award winning services

Ranked 5th

20

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