It has been estimated that Obama and Romney spent over $2 billion dollars trying to win the 2012 Presidential election. Many industries saw a piece of the $2 billion, one of them being the telecommunications industry, which benefited from the intense demand for predictive dialer services.
Every four years telecommunications and Wholesale VoIP providers reap the benefits of political campaigns. We’ve all received these calls. You are sitting at home eating dinner and the phone rings. Sure it’s annoying, but for the telecommunications industry it’s a pot of gold, or at least they think it is. These carriers and providers enjoy a spike in traffic during election years, which culminate in October and early November, and then they hit the proverbial fiscal cliff. Overnight, demand disappears and large chunks of revenue dry up. What’s left is a market that is supply heavy, with little demand.
“At the peak of the election, dialer termination providers saw 4-5 times more traffic than they normally do throughout a non-election year,” stated Jason Tapolci, President of VoIP Innovations.
This intense demand soon outpaced the available supply, causing prices to become inflated. This intense demand followed by the lack of supply initiated a commodity-based service to become a premium-based service. Once the election was over, so was the party and the hangover began. The companies that rode this dialer termination wave are now faced with the downside; reduced revenues, too much capacity, and price fluctuation.
Companies will see significantly less revenue in November than previous months and will be operating with unused capacity affecting margins. To win additional business, companies are reverting to a strategy of lowering prices to force the dialer termination market back to being a commodity-based service where prices rules. The net result is an industry that overnight went from having too much demand to an industry with too much supply, causing a post-election hangover. This was classic supply and demand economics at work.
VoIP Innovations is based in Pittsburgh, PA and provides wholesale VoIP services to Carriers, ITSP’s, Calling Centers, Calling Card Companies and SMB/Enterprise. These services include VoIP Origination, Termination, Toll-Free, 411, e911, Caller ID, CNAM and more. VoIP Innovations was recently awarded #744 on the 2012 Inc. 5000 list and #12 on the Pittsburgh Business Times 100 List of Fastest-growing Pittsburgh-area Private Companies. For more information about VoIP Innovations, visit http://www.voipinnovations.com.