VoIP: Where’s the Hold-Up?

If you read industry press, you have probably noticed there are announcements surrounding new VoIP service providers and service offerings popping up nearly every day. The success of service providers, such as Vonage Holdings Corp., has spawned a telephony gold rush. And, why not? The barriers to entry are low, the regulatory landscape is favorable and the wholesale market has emerged as an effective way for new providers to start providing service until such time as they can build out their own facilities.

With an increasing number of VoIP wholesalers worldwide, resellers can purchase anything from simple VoIP transport minutes to entirely outsourced offerings. Many wholesalers offer a complete package including inbound and outbound termination, local access numbers, and the ability to update end-user information in public databases, such as E911.

To date, the regulatory environment surrounding VoIP has been favorable, making it easier for providers not only to offer a competitively priced service, but also to save on operating expenses and headaches. Although the FCC recently did rule that VoIP providers must provide E911 service to it customers, as an information service, VoIP is not subject to many of the constraints that apply to traditional telephony such as interconnection fees and taxes. Law enforcement access (CALEA) is also not currently mandated; however, like E911, it may be in the near future.

Despite these favorable conditions, actually getting to market with a successful VoIP offering is not as easy as it may seem. One of the first issues to be addressed is differentiation. For new entrants, it is usually not enough to go to market with just another “me too” offering and a business plan to compete on price. Eventually the price will bottom out and consumers no longer will be swayed to a potentially unknown provider to save a couple of bucks over a brand name provider such as their ILEC or cable provider.

One strategy is to target a specific vertical market(s) or type of consumer. A successful offering usually includes not only a targeted marketing plan, but also differentiated applications specific to that community. For example, a service targeting the medical community may include an automated appointment scheduling and reminder service.

The end-user Web portal also can be a source of differentiation. The portal has become a tablestakes feature for VoIP. The portal provides the end user with an easy-to-use interface to set up and control features, such as enabling caller ID or setting a call-forwarding number, as well as an interface to the service provider for service ordering and billing information. Although many vendors offer an end-user GUI with some customization capabilities, a custom-built portal developed by a third party can integrate applications from multiple vendors including custom-built applications.

Once a viable business and marketing plan emerges, the hurdles to VoIP service rollout are more technical in nature. Naturally, the degree of complexity a service provider must contend with depends on how much they are getting wholesale versus providing through their own facilities. The bring-your-own-bandwidth model narrows the service provider’s scope of responsibility somewhat, but the provider still must deal with issues such as endpoint interoperability and business systems integration. Providers that opt to own a bigger piece of the solution will contend with these issues and more.

One of the first tasks is vendor selection. Depending on the solution, the service provider must choose vendors to provide their line-side feature server, media gateway, media server, session border controller, endpoints, and business systems for ordering, provisioning and billing.

Additional applications, such as voice mail or conferencing, often come separate from the feature server and must be selected as well.

With so many products on the market, this is one area where service rollout can really stagnate. Product overlap (such as media gateways with session border control capabilities) complicates the decision-making process even further. An integrator or consultant specializing in VoIP can help design a solution that not only fits the initial service requirements, but also allows for future growth and flexibility in service offerings.

Once a solution is designed and vendors are selected, interoperability testing must be conducted. Many vendors have partner programs and test for interoperability with their most strategic partners. However, even testing with a small number of products quickly can become overwhelming.

Every time any of the vendors in a solution releases even a minor software update, interoperability must be retested.

In addition, leading vendors are bombarded daily with requests to test with the latest whiz-bang phone on the market. For the service provider, this latest whiz-bang phone may be the key to their differentiation strategy and waiting for the vendor to squeeze in the testing means a delay in service rollout. Here, an independent test lab can help by providing third-party interoperability certification of a single product or of the complete solution.

Once all of the components have been selected and tested for interoperability, the solution must be installed, integrated and tested with interconnecting networks such as the wholesale provider. Service providers eager to get to market should turn to an experienced integrator who can provide these services for the solution as a whole.

One of the biggest delays in VoIP service deployment comes when service providers look to the individual vendors to install and integrate their discrete pieces of the puzzle.

While there are hurdles to overcome, the market for VoIP services will continue to explode. With the right business plan and help with implementation, savvy providers can get to market quickly with a differentiated offering.

Tracy Venters is vice president of solutions engineering for tekVizion PVS Inc., a systems integration firm offering consulting and solution design, interoperability testing, integration, custom software development and solution support. Venters leads the company’s solutions architecture team and is responsible for all pre- and post-sales support efforts as well as technical marketing.

tekVizion PVS Inc.
Vonage Holdings Corp.

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