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A New Pricing Paradigm for Hosted VoIP?
By Doug Allen
June 28, 2010 - Article
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Hosted VoIP services are one of telecom’s hottest spaces right now, as myriad carriers and providers scratch to dig out market share with ever-more feature-rich and flexible solutions. But that flexibility has rarely extended to the way these services are marketed and priced; most hosted VoIP providers follow the same general, complicated formula for setting their retail prices. And in a confusing technology segment that often leaves customers baffled when trying to evaluate, much less understand, the pros and cons of a hosted VoIP implementation vs. an in-house PBX or IP PBX deployment, a little clarity would go a long way to helping customers and channel partners decide which option to choose.

It’s no secret that hosted VoIP pricing plans can drive customers to drink for lack of a simple, streamlined way to tally the true costs of such a system. Traditionally, hosted VoIP pricing has been based on the number of users, or “seats,” with usage charges bundled in with the seat license to cover capacity costs. This results in overbilling for underutilized line capacity; most companies have their share of power phone users, but many lines often don’t need the same kind of outbound or long-distance calling privileges.  To illustrate this, think of all the voice traffic on the CEO’s line compared to rarely used extensions in the company cafeteria or shipping warehouse.

By comparison, a few ITSPs — such as Nuvio Corp. and Broadvox LLC  — have adopted price plans that mimic a customer PBX. By separating the lines used (equivalent to number of users) from the usage or capacity required, these providers have hit upon a new pricing model that allows customers to make a far simpler, apples-to-apples comparison between VoIP calling plans, hosted or in-house. And that’s good news for the SMB space these providers are targeting, as well as larger businesses which may also benefit from more flexible pricing plans for their smaller locations.

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