TCT: a Case Study
How a Rural Telco Transformed itself into a
Competitive IP Communications Company
TABLE OF CONTENTS
1. Introduction...................................................................................................................................... 3
2. Brief History of TCT ......................................................................................................................... 4
3. The Need For Change..................................................................................................................... 5
4. Company Evolution ......................................................................................................................... 7
5. The MetaSwitch Difference ............................................................................................................. 8
6. The Long Distance Challenge ......................................................................................................... 9
7. Other Technology Partners ............................................................................................................10
8. Making a Difference........................................................................................................................11
9. Looking to the future.......................................................................................................................12
10. About MetaSwitch...........................................................................................................................13
NOTICE
“Data Connection” and “MetaSwitch” are trademarks of Data Connection Limited and Data Connection
Corporation in the United States and other countries. Other brands and products referenced herein are
the trademarks or registered trademarks of their respective holders.
Copyright © 2006 MetaSwitch, a division of Data Connection. All rights reserved.
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 2
1. INTRODUCTION
TCT, formerly known as Tri-County Telephone and TCT
West, is not your typical rural telephone company. While
many rural telephone companies base their business
plans on guaranteed governmental subsidies such as the
Universal Service Fund (USF) or settlements from
organizations such as the National Exchange Carriers
Association (NECA), TCT recognized years ago that
these funding mechanisms would most likely disappear
at some point, and they needed to position their company
and business to be self sufficient.
TCT also saw that new IP-based technology such as
wireless and Voice over IP (VoIP) would spawn even
more competition for subscribers, yet another threat to
their future business viability. These developments
required TCT to aggressively prepare for an uncertain
future with no guarantees. This meant a total
transformation of the entire company, requiring change
and new ways of thinking in all functional areas of the
organization. Accomplishing this was no small task for
this independent telephone company in rural Wyoming.
This case study examines the transformation of TCT, a
rural, yet very forward-thinking, service provider that
continues to face its challenges head on and is ever-
evolving in order to stay competitive in today’s
telecommunications market. We discuss how they have
leveraged MetaSwitch’s award-winning softswitch
technology as well as MetaSwitch technology partners in
order to maintain their competitive edge.
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 3
2. BRIEF HISTORY OF TCT
2.1 Humble Beginnings
Tri County Telephone Association, Inc. was formed in
1954 to provide local telephone service to rural Big Horn
Basin, Wyoming customers in Burlington, Otto, Emblem,
Ten Sleep, Hyattville, and Hamilton Dome. As you might
expect, agriculture and ranching are the main industries
in this part of the country. Telephone service became a
reality in 1956 when the first dial tone was available in
those areas. Tri County is a rural cooperative made up of
4 exchanges: Ten Sleep, Hyattville, Burlington, and
Hamilton Dome. These local exchanges total about 950
access lines. The Tri County Telephone Association, Inc.
business office is located in Basin, Wyoming.
In October of 1994, Tri County Telephone purchased 7
telephone exchanges from US West causing the
company to increase nearly 700% overnight. From that
purchase, TCT WEST, Inc., a subsidiary of Tri County
Telephone, was formed to serve the exchanges of
Basin/Manderson, Frannie, Greybull/Shell,
Lovell/Byron/Cowley, and Meeteetse. There are
approximately 7000 access lines in the TCT service area.
The company is headquartered in Basin, Wyoming with
another business office in Lovell, Wyoming.
While at one time TCT had a virtual monopoly in the
area, this is no longer the case. TCT faces competition
from many different carriers, including cellular, satellite,
voice over broadband (e.g. Vonage), and even services
like AOL and Skype. It is this competition that has
compelled TCT to become the innovative company they
are today, always searching for new ways to leverage
technology and their local presence in order to increase
their subscriber base as well as the revenue from those
subscribers.
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 4
3. THE NEED FOR CHANGE
3.1 Not just a telephone company
Executives and managers at TCT, including President and General Manager Chris Davidson and
Engineering Manager Richard Wardell, recognized in the late 1990’s that in order to remain competitive
they would need to add additional capabilities to their network to derive additional sources of revenue
from their customer base, as well as stem line loss to competitive carriers and new technology such as
cellular phones. In short, they needed to become more than just a phone company – they needed to
become a total communications provider delivering many different forms of communications and
entertainment services.
3.2 The Move to IPTV
At the time, many rural carriers were considering or implementing “Triple Play” services of voice, video,
and data. TCT was one of these carriers, implementing a TV solution provided by Next Level
Communications (later acquired by Motorola) in some of their exchanges.
Unlike many telcos that have introduced IPTV services, however, TCT was not content with just
delivering content from the usual national networks and Hollywood providers. In order to offer a truly
differentiated, local service, TCT became a content producer, creating local content, such as covering
high school sports events. This creates loyalty among subscribers and a sense of community ownership
that the big cable companies cannot match.
3.3 Network Evolution
In parallel with the introduction of TV services, TCT continued
to build out more than 400 miles of fiber capacity that would
allow TCT to expand its network footprint and capabilities.
This allowed TCT to collapse its legacy Lucent Class 5 switch
from 9 switching centers to one centralized switch with
distributed remotes. While this was a significant upgrade to
the voice network, it did not yet change the existing time
division multiplexed (TDM) access network. In a later section
we look at how MetaSwitch’s IP-based softswitch played a
key role in migrating TCT to a true next generation network.
In those remote cabinets that were not upgraded for triple-play
services, TCT deployed high speed internet access services
using Digital Subscriber Line (DSL) technology from Net to
Net Technologies (now Zhone). The Ten Sleep exchange
even received new fiber-to-the-home technology, provided by Fiber optics continue to play a big role in
Optical Solutions (later acquired by Calix). TCT's network evolution
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 5
As evidenced by these network upgrades, IP services really began to take hold within the TCT network
at this time, and TCT realized that not only will their network have to embrace this new technology, but
their people would need to adapt as well. TCT understood (maybe better than most rural carriers) that
eventually all future telecommunications services will be delivered over a converged IP
infrastructure, and began the transition of both the network and the company to support this future
vision.
UNASAT
Internet Backbone PSTN
IPTV Headend
IP MetaSwitch VP3510
Router Class 5 Softswitch
IP TDM
Backbone Backbone
GR-303
DLC
IP
DSLAM
Residential
Triple-Play
Services
TCT uses the MetaSwitch solution to take advantage of the significant cost savings of IP-based long distance connectivity
provided by UNASAT .
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 6
4. COMPANY EVOLUTION
The technology explosion of the 90’s into today has had a
major effect on the telecommunications industry. New
technology is constantly coming to market, often rendering
previous technology obsolete along the way. However, it’s
not just technology that has to make the transition in order to
survive, it’s also the people that implement, market, sell, and
support the technology that have to be able to adapt. TCT
has definitely felt the effects of this.
While some of the telecom veterans at TCT were able to
evolve with the changing times, other long time employees found it harder, and TCT began hiring new
talent that had the necessary skills to work in the new environment. “Fortunately or unfortunately, some
of our long-time employees that had been with us for years and years simply weren’t able to make the
transition from the long established way of thinking,” states Chris Davidson, GM of TCT.
In addition to hiring new people, TCT has also adopted new ways of selling and marketing their services
in today’s more competitive market. The primary differentiator for TCT is that they are local. They
are local people that live in the community, they provide local presence, local service, and are able to
deliver the personal care or “high touch” to their subscribers that other competitive carriers simply
cannot. In short, they are the face behind the name. TCT participates in local trade shows, places
newspaper ads, sends out envelope stuffers, advertises on highway billboards, and even produces
local radio and TV spots as part of their on-going marketing efforts. They have also invested in
branding the company, with a redesigned logo and new website that emphasizes the company’s
breadth of services and forward-looking vision. These efforts are paying off.
“We are perceived as the local service provider that actually resolves our customers’ issues. We even
get calls from [our competitor’s] subscribers to help them resolve their problems because they can’t get
a resolution from their own service provider,” states Marla Leithead, Public Relations Manager for TCT.
TCT also provides incentives for all employees to sell
“Fortunately or unfortunately, some of
the company’s services, regardless of their position in
our long-time employees that had been
the company or where they happen to be. Installers,
with us for years and years simply
support technicians, accounting, and salespeople are
weren’t able to make the transition from
all encouraged (and rewarded) if they are able to sell a
the long established way of thinking.”
new service to new or existing subscribers. With so
much competition in today’s environment, every little bit – Chris Davidson
helps. President & General Manager, TCT
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 7
5. THE METASWITCH DIFFERENCE
5.1 Overview
A key part of TCT’s network transformation from legacy TDM-based
technology to next generation IP-based technology was their selection of
MetaSwitch’s VP3510 softswitch solution. When the lease on their legacy
Lucent 5ESS TDM switch was coming to an end in 2004, TCT realized that
the timing was right to look at implementing a softswitch-based switching
solution, and MetaSwitch was chosen to make this transition.
5.2 Flexibility
TCT selected MetaSwitch for many different reasons, ranging from
MetaSwitch’s industry leading multi-protocol support, the ability to reduce MetaSwitch's VP3510
provides voice services to all of
and optimize long distance costs by leveraging IP peering partners, and
TCT's 7,000+ subscriber lines
other enhanced services such as subscriber web-self care and Caller-ID
capability for their IPTV service offering.
Perhaps more than any other reason MetaSwitch was chosen as the next generation switching platform
upon which TCT would build their network is the flexibility of the platform and the ability to offer new,
revenue-generating services from the MetaSwitch. The MetaSwitch was able to coexist with the legacy
Class 5 switch while subscribers and services were carefully migrated to the MetaSwitch on a schedule
with which TCT was comfortable. In May 2006, the legacy Class 5 switch was fully decommissioned
and the entire TCT subscriber base is now serviced by the MetaSwitch VP3510.
As an example of why flexibility is important, consider what happened when TCT recently had the
opportunity to acquire Big Horn Wireless, a regional broadband wireless provider. Although it was not
part of the original softswitch deployment plan, MetaSwitch’s strong VoIP support allowed TCT to
rapidly introduce a voice over broadband service, known as VONTel, to these wireless customers. TCT
sees VONTel as very strategic to its future growth – but more importantly knows that their MetaSwitch
will allow them to take advantage of other new opportunities as they arise in the future.
5.3 Support
In addition to MetaSwitch’s superior technical solution, TCT has also
“MetaSwitch has been with us
been impressed with the support they have received. “The
every step of the way.”
MetaSwitch support team has been terrific in supporting our on-going
transition off of our legacy switch to the MetaSwitch platform,” states – Richard Wardell
Richard Wardell, Engineering Manager at TCT. “We knew we’d be Engineering Manager, TCT
implementing cutting-edge technology, and MetaSwitch has been with
us every step of the way.”
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 8
6. THE LONG DISTANCE CHALLENGE
6.1 UNASAT, A MetaSwitch Partner
One of the drivers for TCT selecting MetaSwitch was the
ability to leverage IP technology to drive down their long
distance costs, which in turn would allow TCT to offer better long distance pricing to their subscribers.
After trying service from a few different long distance IP providers, TCT finally found UNASAT, who was
able to implement the solution for which they had been searching.
6.2 Significant Cost Reduction
UNASAT provides TCT with their UNAPEER product, which is a long distance IP peering network.
TCT’s MetaSwitch connects to the UNASAT network over SIP trunks. UNASAT interfaces directly to
the Level 3 nation-wide network, which currently covers about 72% of the U.S. TCT is using the
UNAPEER service to dramatically lower their long distance costs. Compared to what they were
paying, TCT is saving over 66% on their monthly long distance costs.
This dramatic cost savings has allowed TCT to implement unlimited long distance packages for their
customers, which has resulted in two things:
• More revenue. TCT is actually making more money on long distance now than they were
before. Subscribers now opt to take the long distance packages TCT offers rather than pay per-
minute charges which resulted in very little use and therefore very little revenue. Previously,
subscribers were using their cell phones for long distance instead.
• Reduced line loss. The unlimited long distance bundle packages provide an added incentive
for subscribers to keep their home phone, rather than disconnecting service altogether and
solely using a cell phone.
6.3 Quality
Beyond the cost savings, TCT found the quality of the UNASAT
network to be superior to other IP long distance providers they
had been using. UNASAT prides itself in working with high
quality organizations such as Cisco and MetaSwitch. The
combination of significant cost reduction and superior quality has
had a dramatic effect on TCT’s business, both from a revenue
perspective as well as from an operational viewpoint. In TCT’s
words, “if a customer was having any quality issues, we just
routed them to the UNASAT network and the issue
UNASAT CEO Michael McLaughlin (left)
disappeared.”
listens as TCT GM Chris Davidson
describes TCT’s network plans
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 9
7. OTHER TECHNOLOGY PARTNERS
7.1 Overview
In order to coexist in the TCT network, the MetaSwitch
VP3510 needed to support both legacy and IP-based
protocols, a significant strength of the MetaSwitch solution.
MetaSwitch’s industry leading interoperability program,
which has tested literally hundreds of TDM and VoIP devices
since its inception in 2001, ensures that implementations go
smoothly.
MetaSwitch’s Interoperability labs are located
7.2 Access in Alameda, CA where hundreds of devices
have been certified for interoperability
TCT still has 63 SLC2000 Digital Loop Carriers (DLCs) in
service that have now been cut over to the MetaSwitch and utilize the GR-303 protocol. The Next Level
triple play equipment is also connected to the MetaSwitch via GR-303.
TCT is currently evaluating next generation Broadband Loop Carrier (BLC) equipment that will
ultimately replace these legacy DLCs and replace the GR-303 links with an IP-based protocol such as
MGCP, H.248, or SIP. MetaSwitch’s support for all of these key protocols and industry-leading partner
program ensures that whichever BLC vendor is chosen, the solution will have already been tested and
verified in the MetaSwitch interoperability labs.
The Calix equipment (formerly Optical Solutions) that provides the fiber-
to-the-home services to the Ten Sleep community has also been fully
tested by both MetaSwitch and Calix, and is widely deployed by other
service providers, providing TCT with the peace-of-mind that the two solutions work well together.
7.3 IPTV Integration
The lines between communications devices are becoming increasingly blurred, and nowhere is this
more evident than with the telephone and television. In the TCT network, MetaSwitch and Myrio
Corporation, the IPTV middleware supplier to TCT, combine to provide subscribers with screen pop-ups
on their television that show the name and number of callers when the phone rings. This has proven to
be extremely popular with subscribers and provides TCT with yet another competitive differentiator
against satellite companies vying for the same subscribers.
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 10
8. MAKING A DIFFERENCE
TCT has undergone a significant amount of change over the last several years, all in the hopes of
becoming a stronger, more competitive company. Are the changes working? A quick glance at some of
the services that we’ve discussed in this case study indicates they are.
8.1 VONTel
TCT’s voice-over-broadband service, VONTel, is offered primarily to
customers served over their wireless infrastructure, which are all
serviced by the MetaSwitch over IP. All of the same features that are
available to wireline customers are also delivered to the VONTel
subscribers. Since TCT began offering VONTel, the number of
subscribers for the service has increased dramatically. “Our MetaSwitch
has made it really easy to implement our VONTel service,” states
Davidson. “We expect this service to continue to help us increase our
subscriber base and revenues.”
8.2 Unlimited Long Distance
The cost reductions enabled by the UNASAT IP peering network have
had significant effects on TCT’s bottom line. TCT has seen a substantial Wireless broadband will continue
increase in the number of subscribers selecting the unlimited long to be a strategic area of
distance option for their home telephone service. Since TCT connected investment and growth for TCT
its MetaSwitch to the UNASAT network and implemented the unlimited long distance option for
subscribers, rather than losing subscribers to competitors, TCT has seen an increase in subscribers
choosing this option, which has resulted in a significant increase in long distance revenue.
8.3 High-speed Internet Access
TCT continues to upgrade its access network to take advantage of the newest DSL technologies. As
might be expected, dial-up customers continue to decrease while DSL customers continue to increase.
All of these high-speed DSL customers are able to take advantage of bundled packages offered by
TCT, which increases the Average Revenue per User that TCT receives from each household, and
helps reduce customer churn by increasingly customer loyalty.
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 11
9. LOOKING TO THE FUTURE
TCT has embraced the future, and they no longer consider
themselves just a “telephone” company. Recognizing long
ago that a converged IP network would be required to
survive in today’s competitive environment, TCT has been
extremely proactive in positioning itself to maintain a
thriving business as a full-service communications provider
relevant to the needs of its subscribers in rural Wyoming.
In deploying a truly next-generation softswitch solution
from MetaSwitch, TCT is prepared to deliver the latest
exciting, revenue generating services, regardless of the
access method they choose to reach their subscribers.
TCT is already leveraging multiple access technologies,
including copper, fiber, and wireless.
Beyond these access technologies, MetaSwitch’s IMS-
based solution positions TCT to take advantage of the
many SIP-based applications that are or will be coming to
market in the very near future. This will allow TCT and its
subscribers to benefit from the newest IP-based telephony
applications without having to develop them in-house or
endure a long implementation cycle. Additionally, TCT is
well-positioned to take advantage of the fixed/mobile
convergence benefits of IMS, should they choose to
pursue wireless (cellular) technology, either directly or
through partnerships, such as an MVNO (mobile virtual
network operator), as part of their core business.
No one, service providers and vendors alike, can safely
predict what services will be successful and which
services will not, but most agree that a flexible, standards-
based, rock-solid platform is absolutely essential for
success in today’s market. The MetaSwitch solution is the
foundation upon which TCT has chosen to build their next
generation infrastructure, and they are now better
prepared for the challenges on the road ahead.
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 12
10. ABOUT METASWITCH
A division of Data Connection, MetaSwitch leverages 25 years’ experience supplying communications
technology and support to the leading service providers including Verizon, SBC and BT, and major
equipment vendors.
Our unparalleled expertise is derived from success developing world-leading products including the
core protocols (SIP, MGCP, Megaco/H.248, MPLS, IP Routing, …), applications (unified messaging,
conferencing, …) and next generation switching technology. The MetaSwitch Class 4/5 softswitch is
easy to deploy and enables carriers to deliver reliable, toll-quality packet and TDM services in the
access and backbone networks. Together with the MetaSwitch UC9000 Unified Communications
system, it delivers a full range of enhanced subscriber services, Class 4/5 capabilities, and wide
interoperability in IMS networks.
Data Connection is a relentlessly profitable and stable private 70
$M
company, creating the basis for long-term investment and 60 REVENUE
growth that ensures our ability to fund ongoing product EARNINGS
50
investment and deliver first-class customer support. 40
30
MetaSwitch operates from more than a dozen locations
20
across the U.S. including its primary sales, marketing and
10
customer support offices in Alameda (California) and Reston
0
(Virginia), with worldwide headquarters in London, UK. 82 84 86 88 90 92 94 96 98 00 02 04
Data Connection Group Results, 1982-2005
For further information on how MetaSwitch can help service
providers successfully migrate to VoIP and IMS-based networks, visit www.metaswitch.com.
TCT: A Case Study – How a Rural Telco Transformed itself into a Competitive IP Communications Company | 13
MetaSwitch, a division of Data Connection
1001 Marina Village Parkway, Suite 100
Alameda
California 94501
Tel. (510) 748 8230
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www.metaswitch.com