Why carriers should offer IP Centrex

Today, we’d like to highlight some of the benefits we believe IP Centrex can offer. Like the IP PBX, IP Centrex has “grown up” to provide most of the commonly used features of traditional Centrex. However, IP Centex has several advantages.

First, the IP Centrex user can be served off of an Ethernet connection or a traditional phone connector. So customers who want to take advantages of the benefits offered by a new IP phone can do so; those who want to keep their analog phone sets can also “keep on keeping on.”

Second – and this is a BIG deal – IP Centrex customers don’t have to be literally tied to a particular “numbered pair” of copper wires. This means a user becomes part of a distributed Centrex user group regardless of location. The implications of this “big deal” mean that the many provisioning issues for Centrex customers who are in widely different locations are much simpler.

However, this advantage can also provide some hurdles for the incumbent local exchange carrier to overcome. For example, since distance limitations disappear, regulatory agencies may have a problem with an incumbent local exchange carrier providing a regulated service like Centrex across service area boundaries. And in a new world where Centrex services can offer long-distance competition, enterprise customers have come to expect multiple options of service pricing like flat-rate usage charges per line.

The implications to local carriers: Just about anybody can offer Centrex to the local customer, provided the customer can get an IP connection. And pricing models will shift with increased competition, so the local carrier stands to lose revenue to competition or self-cannibalization.

So what’s a carrier to do? Well, remember the days when carriers didn’t want to offer frame relay service because they were afraid they would lose their private line revenue? As it turned out, private line revenue continued to grow at a modest pace, and frame relay revenue brought in significant new revenue streams to the carriers. We think the same good fortune will apply to the carrier who begins to get serious about IP Centrex.