Vodafone looking to squeeze out independent IPX providers

Vodafone Carrier Services intends to shake up the IPX (IP Exchange) market this year, with a view to taking third party providers out of the picture, according to the division’s CEO Brian Fitzpatrick.

The unit, created just over eight months ago in the wake of the 2012 acquisition of Cable & Wireless Worldwide, is currently investing heavily in MPLS and by the end of the year will have what it claims is the world’s largest physical MPLS infrastructure.

The firm is also investing on solutions that will run on this infrastructure and Fitzpatrick told Telecoms.com that Vodafone will also have one of, if not the largest IPX infrastructure in the world, when work is complete.

With operators playing at this scale, he said, “the industry doesn’t need third party IPX.” Providers of such services includ Aicent, Sybase 365, Syniverse, TNS, xConnect and a number of others and Fitzpatrick makes no bones about the fact that Vodafone’s world view does not have space for them.

“What we’re doing, pointing the industry towards an IPX access, is quite threatening to third party aggregators, because for the first time their business model is in question,” Fitzpatrick told Telecoms.com. “The industry doesn’t need third party IPX but it does need to connect to Vodafone because we have 20 per cent of the world’s handsets. And while everyone wants to come to us we’re just giving them a better door to come through.”

Fitzpatrick maintains that, when it comes to interconnection, every additional link in the chain affects the quality of the service. As a result, taking one of those interface layers out of the picture will improve the service for the carrier and the end users. It also means Vodafone can sell additional services direct.

“We’re eliminating quite a few of these third parties that are only in the food chain because there wasn’t an alternative. There are companies out there claiming that they are interconnected to Vodafone for LTE roaming but they’re not directly. But the guy plugging into them doesn’t know that,” he said.

“IPX infrastructures enable 4G signalling and all the mobile operators want to interface with us on that level. Now they can do that via Vodafone Carrier Services. So one of our strategies is to eliminate the third parties, these aggregators, because there’s no need for them any more in our mind,” he said. “If you’re a mobile operator wherever, you can just take an IPX interface straight to us so you’re interconnected with the Vodafone network for LTE and I can sell you ten other products on top of that with no extra interconnection needed.”

But John Wick, senior VP and general manager for Mobile Transaction Services at Syniverse, said that third party IPX providers have substantial portfolios of customers that value an offering that is independent of a large, international competitor.

“While a handful of global operator groups have the strategy and resources to build their own IPX network, hundreds of other mobile service providers – both large and small – have shown their preference to trust truly independent IPX providers with global reach like Syniverse. The many benefits of a neutral third-party IPX include the professional services, network monitoring and value-added services available to mobile service providers without having to build new infrastructure.”