Every company gets phone bills. Whether you use hardware phones or laptop software phones or mobile phones, video phones or audio phones, your calls have to get carried over the some service provider’s network, and that costs money.

The promise of Voice over Internet Protocol (VoIP) was that your voice calls would go over the Internet, or if you wanted a secure and high-quality voice service, over  the corporate WAN. Your WAN had the advantages of already connecting all the office locations together, and was already carrying lots of data traffic and in most cases, had capacity to spare for voice as well. Once Cisco migrated to a Unified Communications network in 2000 we put all our on-net calls (calls between Cisco sites) on our WAN. Doing this didn’t require very many links get bandwidth upgrades  –  today voice traffic is only about 10% of total WAN traffic, so in effect adding these voice calls to the WAN meant that voice traveled for free. (It was the data traffic that bought those WAN connections!). This traffic did require new Quality of Service configurations to protect voice packets from getting stuck behind data traffic and bringing voice quality down, but that was a one-time operational cost to set up QoS, rather than special equipment.

Putting on-net calls on the WAN didn’t make all voice calls free at Cisco. About 55% of our calls are off-net – which means, they start at a Cisco phone (on the Cisco net) and end up connecting to someone not on the Cisco net: a customer or partner or vendor, or to a Cisco employee at home or on the road. These calls all used the Public Switched Telephone Network (PSTN). and about 2/3 of these were expensive international calls. So even after migrating to UC, close to half of our phone calls still traveled over the expensive PSTN; we hadn’t come close to getting free phone calls. Not yet.

Right away we realized that we could save some of these costs by routing off-net calls using tail-end hop off (TEHO). TEHO means carrying the call as far as possible across your WAN, and then hopping off the WAN at some gateway close to the call destination – the tail end – so you can carry the “ last mile” of the call over the PSTN as a local call. Local calls aren’t free, but they are usually a lot cheaper than a global long distance call.

We started by building a few call routing rules into our network, built up capacity at some voice gateways at our largest international sites, and started saving money. Over time we have added more and more call routing rules to our clusters, with about 60 international voice gateway destinations, and today we do a LOT of TEHO at Cisco. Configuring these routing rules isn’t easy. The good news is that it’s much easier configuring these routing rules now that we are  running on CUCM 10 (starting with anything after CUCM 7, when local route groups were added).

One Tip: Routing calls to the nearest gateway location isn’t always the cheapest. Sometimes it’s cheaper to call Milan from Paris than from Rome. (This doesn’t make sense, but as it turns out, phone company tariffs aren’t required to make sense). It’s worth checking all the local voice tariffs before setting up your call routing rules. Tariffs change pretty frequently too, so you need to stay up to date.

Another tip along those lines: Having lots of gateways near popular calling destinations is not always better than having a single centralized gateway, in some locations. Telephony vendors will provide better rates for higher volumes of traffic. Cisco IT found that we could get better rates from many calls to Europe by consolidating traffic (destined for many countries in Europe) into a single international gateway in Amsterdam. This doesn’t work for all European countries, but for enough to make having a large gateway in Amsterdam worthwhile to us.

One More Tip: TEHO is not legal everywhere. There are very strong government regulations in India and Pakistan and much of the Middle East (where the governments either own the dominant telephone company, or get significant revenue from it), and these regulations forbid carrying revenue-generating voice traffic over anything but their local PSTN. In those countries we can’t use IP Telephony for long distance, and we can’t support TEHO. Just to be able to have a single global UC network, we configured the local CUCM cluster in India to ensure that all calls in or out of India were carried directly to the PSTN, using logical partitioning (described in detail in this case study.)

So those “free” telephone calls? Well, the on-net calls have been free from the beginning (not counting the WAN costs, which we agreed not to count). And the off-net calls are now much, much cheaper, thanks to TEHO — most of the time anyway.

Two More Tips: If this sounds interesting to you, here are a couple places to go for more information.

And if you have any good tips for TEHO, or any other way to save money while providing enterprise-quality voice in your company, please share one or two in the comments section below.