Intelligent Solutions

Thanks for another great year!

Simon Woodhead

Simon Woodhead

18th December 2014

I want to wish you the best for the coming festivities and to say thank you for working with us this year. I really hope it is a good one for you and your family. I also want to recap on a great year.

Before doing so, I need to get the usual pleas out the way. Christmas is historically a time when we’ve seen customers and customers’ end-users fall victim to VoIP Fraud. We offer more protections than any other carrier but they require you to configure them. This time last year we highlighted 4 quick ways to stay safe from VoIP fraud and then after a very busy Christmas period with those who ignored that advice, we started January with “Christmas VoIP attacks. How did you fare?“. This year it is easier than ever for you to help protect yourselves as all the relevant settings are now available in our new portal. Please please take 2 minutes to lock some of your balance, set notifications to somewhere where you’ll see them (e.g. SMS), and configure some channel/rate limits for international and hotspot destinations. If you need any help at all, please contact us. As I mentioned in a recent talk (part one ‘sets the scene’, part two sums up what you can do about it) bluntly begging ITSPs to take the “mug me” badge off: “They know who you are, they’ve recon’d your equipment, they await opportunity”. Christmas is sadly that opportunity so please use at least some of the dozens of features we make available to limit the costs to you.

We’ll be on-hand over the entire period ensuring the network is operating and dealing any issues as they arise. However, the banks will be closed and we won’t be dealing with routine issues. Please therefore ensure you have enough credit before the period and if you run out please make use of the credit card top-up facility in the portal for self-service top-up. Remember you can also add and remove IP addresses through our API and the new portal so do not need to wait until the New Year.

2014 was our 17th year in business and, at the risk of saying this every year, it is easily the most exciting and fulfilling one yet!

IP-infrastructure-wise the majority of work was done in 2013 but we haven’t been sitting around. Our fibre ring around Manchester data-centres has been put to good use and we have two more data-centres on it PoP’d – Telecity Williams House and Kilburn House – making three sites in Manchester alone. We also now co-own a fibre ring around London, taking in the 6 main London data centres. This is proving really handy for bringing new customers on-net as well as enabling us to provide waves and metro-ethernet services to other operators.

In SS7 terms we continue to swim the opposite way to the industry. We came from IP and have invested in SS7 subsequently for specific reasons of quality, control and value-added to our customers. Others who came from SS7 and have discovered IP more recently have been busy dismantling their regulated SS7 interconnects and stepping down a tier to use “managed services” from BT. Their customers will at some point have to ask what value-add they’re now paying for and we believe being dependent on an unregulated managed service with no regulated interconnect (and associated procedures) to fall back on will end in tears over coming years. Critically the PSTN is not BT, BT is a part of the PSTN as are we, so to grow our position in that eco-system we’ve interconnected with players 2 and 3 in the UK market this year to offer our customers the best combination of quality and performance we can. This has gone on behind the scenes but we’ve been really touched to get mails from customers commenting how our PDD (post dial delay) is a tenth of provider X and a third of provider Y – those are the kind of differences we work for so love them being noticed. Our service also works at weekends unlike certain “managed services” we could mention.

That brings us to an interesting point. Our Virtual Interconnect service has catapulted our inbound volumes ahead in 2014. We now bill the likes of BT 10-20 times as much in a typical month as they bill us and that ratio is growing. We’ve migrated several range holders from IP Exchange to Simwood (coming for the control, reliability and genuine wholesale payments) and we’ve saved many more where we get to them before they pay the exorbitant set-up fees. With Virtual Interconnect Mobile enabling mobile number ranges to “work” for voice, SMS and porting (unique to Simwood) we’re sure that is going to be a key theme of 2015.

In terms of other inbound voice, despite OFCOM all-but eliminating key revenue for non-incumbent operators on inbound geographic calls, whilst enabling BT to increase its transit charges, in the Narrowband Review, and rendering porting loss-making we’ve pressed ahead with establishing porting agreements with other operators. Owing to the value added by our customers, our support levels and quality of service we close 2014 with 509x as many numbers ported into the Simwood network as ported out. That is a truly amazing statistic and in fact most of our porting-partners have yet to win a Simwood number at all!!! Rachel and team do a great job and pass on thanks to the customers who make this abhorrent process as easy as possible. Don’t forget, you can now also submit ports through the new portal, and this has some proprietary logic to guesstimate where a number might reside.

In outbound voice terms we’ve grown enormously and there’s been some key changes. Owing largely to our unique fraud controls, and particularly the features of the new portal, we’ve seen numerous customers switch their entire outbound traffic to Simwood. We’ve been making the point for a while that at this stage of the market it is naive to micro-manage margin as a single fraud incident will dwarf the gain. The wise manage risk and we offer the best tools for doing so in the industry.

That has had an interesting effect. Our entire UK volume is of course terminated over our SS7 interconnects to other PSTN operators, and that represents 80%+ of our traffic now. The 20% that is “rest of the world” is however not insignificant and in 2014 we came to the attention of more than one European incumbent wishing to pitch for our business. The result is that 100% of our termination traffic egresses to tier1 operators, either directly (e.g. Sri Lanka), or in a transit capacity to their own direct routes. This has enabled us to maintain or improve both price and quality. However, “Tier1” alone is not a badge of quality as I recently wrote on Tref’s blog – in our experience as they’re seduced by the flexibility VoIP offers they’re inclined to offer vastly different qualities of service between different transports, i.e. VoIP vs. SS7. We’re now able to sell SS7 quality routes at competitive rates over a VoIP transport, with real-time control and an actual network – this is quite a unique position in the market albeit one with subtleties that only become obvious when you cut through others’ marketing-spin.

Virtually and in person I’ve presented our VoIP Fraud Analysis research and recommendations all over the place in 2014 and I know those of you with bigger conference travel budgets are sick of hearing it! Latterly our presentations have been less public as our position of authority on the topic has led to several meetings with regulators and agencies interested in our perspective! It has also led to some great contacts in roles I didn’t know existed which can only benefit our customers in future.

Our customer base has grown 45% in 2014 to 640 wholesale customers and that includes some big ones. There is some inevitable churn but to our knowledge, as with porting, we’ve gained more from each other provider than we’ve lost by a massive degree. Of course, that belies the true picture as many operators deal with us and our key competitors. I’m pleased to say therefore that revenues in 2014 are 80% higher than 2013 as not only do we have more customers, but the existing ones are trusting us with more of their business, and are themselves growing. Hopefully that gives longer-standing customers confidence that they’re in the right place. Increased scale fuels all of the above factors that benefit all customers, and gives us the means to continue investing in the network. We are nothing without our customers though so I’d like to extend heart-felt thanks for working with us and trusting us with your reputation.

I’ve so far ignored the elephant in the room – mobile. This isn’t quite “one last thing” since we’ve been very public for a while about what we’re doing but it is a big one and I believe is going to transform the business in 2015. It is fair to say it wasn’t in the business-plan for 2014 but opportunistically came about in the first half. However, our time-scales quickly went out the window as we realised that a) no solution on the market was adequate for what we needed and  b) how protected and hard to enter this space is. Resolving the first one saw us partnering with a great MNO who have built us our own mobile-core (everything except the radio access) and given us access to Three’s RAN in the UK. We’re an MVNE but without the constraints over brand and service that MVNEs tied to MNOs have, and with an existing IP and SS7 network that they usually lack. Dan Lane joined us in Q2 to lead this project because, in his words, “Simwood is the only company that understands and shares my vision for what the future of mobile looks like and has the culture, the technology and the balls to make it happen.” If you missed what the commentators thought of that check out Mobile Industry Review. Dan is doing a great job and the result is definitely worth waiting for. You might want to read the latest update (and subscribe to more).

I also need to thank our team. We’ve grown in head-count in 2014 and have some amazing colleagues, many of whom you won’t ordinarily come into contact with as they’re beavering away behind the scenes. I’m really grateful.

2015 is looking to be a tremendous year and we’re incredibly excited about what we have in the pipeline for you. We think it is going to be a pivotal year in our history and, in the case of mobile alone, a significant opportunity for our customers. Of those we’ve spoken to in depth about 50% of their end-users voice business is fixed, the rest mobile. We presently see a proportion of the fixed spend as they migrate end-users to IP. Mobile enables them to capture the other 50%, or put another way: double revenue! Add to that the customers planning creative and disruptive new services based on our platform and you can hopefully appreciate our enthusiasm!

Finally, I’d like to again wish you and your families all the best for the coming season and we look forward to working with you in 2015.

PS – don’t forget to set your fraud limits in the new portal (see paragraph 2)!

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