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VoIP Services: Models for the Provider
By John Todd, CTO of VoIP Inc.
Cable companies, small regional telephone companies, and emerging data-delivery providers have the most promising customer base for delivery of VoIP services, but just as often are the least prepared to actually deliver those products. Various strategies exist for deploying VoIP services to the existing customer base, some of which are more dangerous than others, but it is abundantly clear that these firms must act, and act quickly, or let the competition cherry-pick customers from their existing customer base.
This advantage of geographic irrelevance is also a danger to firms that closely guard their customer base in a particular region. The �wire provider� firms who supply physical connections to households and businesses must try to create more value in bundling services, because there is no longer any physical attachment between the customer and their service provider except for that �last-mile� loop. While it may be the case that firms in distant states (or even nations) can now provide telephony service to remote customers, that does not change the sales and marketing perspective: the local provider of the loop (cable, telco, etc.) will always have an advantage in the initial sale to the customer, because of advertising, geographic preference, single-bill requirements, or simply brand loyalty. The companies that provide physical layer services to end-users have first pick for delivery of IP telephony services; customers are theirs to lose.
There are several models available for offering VoIP services to end customers: build-it-yourself, outsource, and resale. Build-it-yourself is a serious undertaking, more than perhaps most data service firms comprehend. The delivery of service (turning VoIP into PSTN, or VoIP-to-VoIP) is not overwhelming, though technically challenging without skilled staff. The real challenge for fledgling VoIP providers is the development of the billing and OSS platform, as any telephony veteran will attest, and this is the one factor that makes build-it-yourself very unattractive for most firms. The last method (resale) is the easiest, but is the most dangerous from a long-term view: the customers are owned by a third party firm, and typically only a percentage is paid back to the data services provider. Branding in this circumstance is difficult, and customers quickly discover that they are not working with the facility provider at all. Billing is not directly facilitated by the provider, and the provider runs the risk of the customer service issues quickly leading to customer dissatisfaction with both the facility provider and the VoIP reseller.
As an intermediate solution that has none of the risks of build-it-yourself nor reselling is outsourcing. Outsourcing seems to be the most balanced from a risk/investment perspective and provides very quick service deployment in a fully branded way. The OSS and telephony back-office platform as well as termination and perhaps even network resources are handled by a firm which has multiple other customers and therefore has built a scaleable system. The customers can receive bills which reflect their bundled services, because the product is branded with their service. Customer support can be handled at Tier 1-2 by existing (or inexpensive) staff who perhaps are already on payroll for existing data services customer support. Lastly, the customer is �owned� by the provider but
Cable Companies
Cable operators are in a unique position with their ability to offer telephony services to their customer base, as they typically are the only competition for residential customers which can compete with the ILEC for bundling physical delivery of packets as well as the services that are delivered via that IP network. However, small or medium sized cable providers are often ill-equipped to deliver telephone services, as the capital expenditure for equipment and recurring expense for experienced staff are often outside the budget or revenue stream that such a product could possibly bring. Thus, cable companies are increasingly looking to outsource VoIP services to third party providers.
Telcos
The abstraction of telephony service away from being tied directly to the physical wire plant is clearly a threat to the telephony firms that traditionally have relied on the assumption of a �captured� local customer base. This is no longer the case if the customer can somehow obtain Internet access at broadband speed. The US market is starting to see broadband accessible even into some of the more rural areas. Telephony firms would see VoIP as a threat if offered by competitors, but an asset if offered on their own data delivery platform. The reduction of truck roll costs and consolidation of service delivery onto a single cable improves delivery intervals, reduces costs for capital equipment, and
In order to attract and retain the customer, a more broad service offering is required from each firm who is trying to maintain or expand their revenue base. Adding VoIP into the product mix is obvious; the term �triple play� (data, voice, video) is now almost a cliché, and VoIP delivers one third of the requirement once the �data� portion is in place.
The cannibalization and conversion of TDM customers into VoIP customers is a valid concern, but those customers will move elsewhere if service and price structures are enticing enough. As the saying goes: �Eat your own lunch, or someone will eat it for you.�
VoIP, Inc. is an emerging facilities based global service provider of superior quality Voice over IP based solutions offering residential and business customers more user friendly and affordable ways to communicate today.
http://www.voipincorporated.com
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