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Win-win from wholesale VoIP

Having carriers provide wholesale VoIP services to other providers, the communications sector is empowered to lower costs, improve quality, and help smaller operators gain a competitive advantage.

Mitchell Barker, founder and CEO of explains that resellers have the option of partnering up with a service provider to on-sell their services, but using their own branding. “There are many benefits to wholesale VoIP, and the services that a provider can offer are not limited only to voice, but to ISP and data services.

Wholesale VoIP providers often offer low cost, high quality solutions. By catering to carriers, wholesale VoIP companies can focus on providing high cost savings as well as reliable and effective service.

Michael Colin, Sales Director, at BitCo, says that reselling IP telephony as a wholesale VoIP company is becoming more and more popular because it offers many benefits. “There is a rare mutualism which exists in the world of wholesale services in which all parties involved stand to benefit, including the provider of the wholesale services, the intermediary or wholesale purchaser, and the end consumer. The main reason why wholesale is equally beneficial to all concerned is because the risks are greatly reduced while the core business and specialities are exploited,” he explains.

By selling large quantities of bandwidth to other providers, the wholesale VoIP providers are able to drastically increase their volumes. This in turn allows for increased buying power. Revenue derived from these sales by the Tier 1 provider is also fed back into further infrastructure development.

Colin adds that through the growth that is a function of the wholesale arena, the provider can also indirectly increase its footprint, expanding into areas where infrastructure expansion is not immediately feasible. “The purchaser of the wholesale voice and data is able to circumvent building vastly expensive Tier 1 infrastructure and the onerous compliance requirements of being an Electronic Communications Network Services Provider, which is just as costly and resource-draining as building infrastructure.

For example, many smaller Wireless Internet Services Providers (WISPs) are often unable to take advantage of the benefits offered by the deregulation of the telecoms industry due to the massive indirect costs of being fully compliant, Colin says. “WISPs purchase bulk bandwidth from an upstream Tier 1 provider, piggy-backing off the infrastructure and avoiding the particularly costly backhaul and redundancy. Being a licensed provider, specifically with network services, you live in a world of reporting and compliance parameters. This requires resources, time and effort which smaller business may not have the means to dedicate.

The other upside of wholesale VoIP sales is that the specialisations of providers are not diluted by the Tier 1 provider trying to build a network and support staff to sell to the end-user, Colin points out. “This provides for healthy competition, allowing smaller operators to grow and not be strangled by the larger operators.

Barker points out that VoIP service providers usually design their wholesale VoIP packages with a wide variety of features, and that ultimately the consumer benefits the most, receiving reasonably priced voice and data services while dealing with their preferred supplier. “Ultimately, wholesale VoIP is cheaper for the WISP and the end-user, and everyone benefits – from the Tier 1 provider to the end user. The end user doesn’t pay higher prices to help the Tier 1 provider recoup their financial outlay for infrastructure, the Tier 1 provider has ‚Äòguaranteed’ sales from WISPs and gets to expand its footprint, and the saving is passed onto future end users in surrounding areas as the provider continues to expand. Wholesale is win-win for every link in the chain.

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