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How to Become an ITSP & Start Your Own VoIP Business

Posted by Vilius Stanislovaitis on October 15, 2015 at 11:21 AM

The First Book About Starting VoIP Business

The growth of the VoIP market and success stories of brands like Skype and Viber attract the attention of many entrepreneurs, especially those who are active users of internet telephony. However, when startups start digging deeper, about what’s needed to become a VoIP service provider, they get lost in a bunch of information found in the Internet. So what do you really need to become an ITSP (Internet Telephony Service Provider) and launch your own VoIP service?

Understanding Telephony

First, you should have a general understanding about telephony. The best understanding comes from work experience, but if you don’t have that, you may read books about VoIP technology, use online resources, such as voip-info.org or visit specialized blogs like this one. If technology is not your strong suit, you should consider finding a partner with a technical skillset. Even though there are one-man companies in the VoIP world, the most successful ones are usually established by two or more partners. In this case, you can accept responsibilities according to your strengths.

Choosing a VoIP Service

There are many services that are based on VoIP technology: callback, calling cards, call shops, residential VoIP, mobile VoIP, SIP trunking, IP PBX, Unified Communications, wholesale transit, VoIP-PSTN and grey termination. Which is the right one for your business case? The answer lies in your target market, behavior of your potential clients, and the competition. You need to make a client and competition analysis and evaluate the general trends in your market.

Deciding on a Business Model

There are two options – being a reseller and a service provider. Even though everyone is dreaming about the highest level, the truth is that it’s the best to begin with the lower stage and grow step by step. Being a reseller allows you to minimize your investment and risk. You’ll be able to provide VoIP services based on commissions (or by applying your own margin). Once you’ve built your user base and your business grows, you may consider investing in VoIP infrastructure and becoming a VoIP provider.

Softswitch Selection

If you decide to become a VoIP provider, you’ll need to acquire your own infrastructure. The key platform is a softswitch (short for a software switch) which connects calls between clients and providers. For retail VoIP, you’ll need a class 5 switch and for wholesale VoIP a class 4 switch. Finally, if you are unsure which path to choose, you may select a class 4 & 5 softswitch, which is an all-in-one solution.

Finding Partners and Suppliers

To run a VoIP business, you’ll need to select multiple suppliers that will provide you with different resources. The two key resources are voice traffic (termination) and DID numbers. In addition to this you may need VoIP softphones and applications (if you approach the residential market), virtual PBX (if you provide SIP trunking and hosted VoIP services), and additional equipment such as phones, ATAs or gateways.

Launching Your Service

Finally, once you’ve completed infrastructure deployment and signed contracts with suppliers, it’s time to launch your service. The best path is to begin with a close group of clients (also called “beta clients”) who could share their feedback. Once you feel confident about the quality of your services, you should begin an active sales and marketing campaign to attract more clients. Besides daily operations, you’ll need to dedicate time to review and adjust your business plan in order to make the best decisions for your VoIP business' growth.


P.S. If you’d like to learn more about the stages of starting your own VoIP business, there’s a book about it. However, it’s in the stage of a manuscript and we need your support to make it a reality.

Be a part of this book by supporting this project on Kickstarter!


We thank Vilius Stanislovaitis for this Guest Post contribution.


Edited by Cherie L. Steffen

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Tags: Entrepreneurship

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