Looking for IP Services

David Byrd : Byrd's Eye View
David Byrd
Chief Marketing Officer for ANPI

Looking for IP Services

Clearly, the focus of Broadvox and similar ITSPs is to promote SIP Trunking or SIP termination and origination. However, there is a larger and faster growing market in the business community for simple VoIP solutions. According to In-Stat, 41% of businesses with VoIP capability have no legacy TDM voice services, vs. 34% in 2008 and 42% of US businesses now have a VoIP solution in at least one location. Now these are interesting numbers but said another way, 59% of businesses using VoIP continue to use either TDM equipment or voice services to conduct their daily operations. While SIP Trunking offers superior routing, business continuity services, voice quality and reliability over simple VoIP, simple VoIP is easier to implement and requires less infrastructure investment. In the enterprise space, simple VoIP is used to connect between various corporate, regional and branch offices. Usually, IP voice traffic is carried along with other data associated with general business applications. At the enterprise level, an IT department can manage the service and QoS. However, when it is a small business deciding to try out VoIP, there is an ITSP involved.

The best known simple VoIP ITSPs are Vonage and Comcast. Vonage has the better marketed name but Comcast has more than triple the number of subscribers. However, in the simple VoIP business usage space, the real threats continue to be the efforts of AT&T, Verizon and other LECs. This is more because that is where the base of users resides rather than the quality of service or variety of service offerings.

Looking at AT&T as an example clearly shows it is attempting to address the lower end of the market with a variety of products. Although AT&T U-verse is intended for residential/home use, some SOHOs and SMBs are slipping under the radar and signing up for service. Next would be the Business In a Box offering followed by IP Flexible Reach. Only IP Flexible Reach is a SIP enabled product. Each of these solutions becomes more complicated and expensive as you navigate from the residential offering to the true SMB product. As noted in a previous blog, pricing for these products is not dramatically different from that of the TDM offering...yet. With AT&T interested in sunsetting its TDM network, it is positioning its primary business to make the transition from TDM to, I suspect, improved IP offerings. At present Broadvox and other ITSPs can easily beat AT&T's pricing, installation and turn-up timeframes, but expect that to change.

Today, just 17% of all businesses use IP only for their communications needs. The service providers in this space are diverse and remain without a dominant market leader as these early adopters continue to explore a variety of solutions and provide many opportunities to carriers like Broadvox. Which one of the major LECs will stop this loss of business customers first? We'll look at Verizon next.

See you on Friday.



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