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Wholesale VoIP Feature Article

4G VoIP, Wholesale VoIP Services Surge

August 16, 2011

By Rajani Baburajan, TMCnet Contributor

4G operators can increase their average revenue per user (ARPU) and improve their return on investment (ROI) by offering VoIP as compared to offering data only services, according to Wireless2020.

Many operators could see an added improvement in their ROI by deploying cloud-based delivery solutions as compared to directly managing in-house VoIP platforms.

Launching 4G VoIP service will result in a 25 to 50 percent increase in ARPU, a 10 percent increase in IRR and a 5X-10X increase in NPV versus a data-only service strategy, according to Wireless2020 .

 4G operators need to offer a complete suite of value added services to gain and keep subscribers without yielding market share to competitors. Deploying a cloud-based hosted VoIP solution could further increase IRR by an additional five percentage point for many operators, Wireless2020 said.

 “Operators deploying VoIP over 4G networks are faced with a critical decision as to whether they should build and manage an in-house VoIP platform or partner with a cloud-based, hosted VoIP solution provider,” said Haig Sarkissian, principal consultant of Wireless 20/20 (News - Alert), in a statement.

“We found that although the average VoIP revenue contribution per end-user is largely the same, the investments needed and the ROI vary drastically depending on whether an in-house approach or a hosted solution is used,” Sarkissian added.

 In addition to the large CapEx investment needed, the operating costs of an in-house solution are in the range of 30 to 40 percent of the total VoIP revenues, in addition to call termination charges. This adds both a financial burden and an organizational support burden, putting a drag on the profitability of VoIP services, even for the largest operators.

 Wireless2020 recommends that 4G operators should include value-added VoIP services to their offers to monetize the potential of 4G networks. The positive financial impact of VoIP can be maximized by implementing a cloud-based solution.

A recent research from Point Topic finds that VoIP has more than 120 million subscribers worldwide. The research also said that VoIP market is set to accelerate to generate $40 billion annual revenue by 2015.

Another trend that is particularly popular right now is wholesale VoIP, a service provided by wholesale carriers to other service providers that deals with start ups, additions or extensions to their networks. Wholesale VoIP providers allow you to talk easily with your family and friends while the provider worries about the back-end work.

One company that is leading the wholesale VoIP surge is Alcazar Networks, a nationwide wholesale VoIP provider. Recently, Alcazar Networks announced that is now offering direct on net/off net Canada termination routes at significant savings, building upon Alcazar’s decision last month to cover 100 percent of Canada which includes over 26,400 routes. These Canada routes are in addition to the wholesale VoIP company’s full US48 dialer termination deck which currently has over 140,800 routes.

Want to learn more about 4G wireless technologies? Then be sure to attend the 4GWE Conference, collocated with TMC’s (News - Alert) ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. The 4GWE Conference provides unmatched networking opportunities and a robust conference program representing the wireless ecosystem. The conference not only brings together the best and brightest in the wireless industry, it actually spans the communications and technology industry. To register, click here.

Rajani Baburajan is a contributing editor for TMCnet. To read more of Rajani's articles, please visit her columnist page.

Edited by Carrie Schmelkin

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