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Selecting a Wholesale DID Origination Provider Part 1: Footprint and Features

Posted by Jason Tapolci on October 15, 2012 at 11:38 AM
Jason Tapolci

With today’s technological craze, the VoIP industry is booming. The increase in VoIP technology has created an abundance of service providers and wholesale DID origination providers. This can make choosing a carrier or wholesale VoIP provider a confusing process. The purpose of this 3-part white paper is to help you understand what to consider when selecting a Direct Inbound Dial (DID) Origination provider. The first white paper in this series will examine DID footprint coverage, features, and carriers.

Selececting a Wholsale DID Origination Provider MacBook Desk Scene

Choosing a provider that has the right mix of coverage, price, and quality is a challenge. First, in terms of coverage, identify where you will be selling your service, either regionally or nationally. This will help you identify and focus on carriers that fit your strategic coverage area. Secondly, determine your customers’ desired DID features. These features include Caller ID (CNAM), fax (T38), and/or texting (SMS) capabilities. Identifying your customers’ feature needs will help refine the list of carriers and prevent lost future business.

Once you have defined the desired coverage area and DID features, the next step is to find a carrier. There are three types of carriers to choose from. They are ILECs (Incumbent Local Exchange Carrier), CLECs (Competitive Local Exchange Carriers), and wholesale providers. ILECs, such as Verizon and AT&T, are at the top of the telecommunications food chain and are the gorillas of the industry. ILECs offer the national footprints but usually have the largest monthly minimum commitments. If you can swallow the large minimum commitment, these providers will have the most competitive pricing to offer. ILECs typically sell to companies that spend more than ten thousand dollars per month. This steep minimum commitment makes it nearly impossible for the smaller reseller to use these networks.

On the other hand, CLECs offer a more concentrated footprint, or what they normally refer to as their on-net footprint. A CLECs strategy focuses around selling and managing their on-net footprint, which typically mirrors the states where they have obtained a CLEC license. The benefits of using a CLEC is that they are tied directly into NPAC (Number Portability Administrations Center) and they operate and control their own facilities. Both of these advantages allow CLECs to more accurately control their cost, offer competitive rates, and maximize their margins. The downside to this model is that a CLECs footprint is limited in size. Therefore, if a CLEC doesn’t fit your coverage area, a second or third carrier will be needed to cover your footprint.

The third type of carrier is a wholesale VoIP provider. Wholesale VoIP providers are also known as aggregators, because they stitch together multiple ILECs, CLECs, and wholesale footprints to build one large ubiquitous network to resell. The benefit in choosing a Wholesale VoIP provider is their convenient mixture of coverage and price. Wholesale VoIP providers offer the ability to leverage and aggregate dozens of providers together. Then, these wholesale providers use their large amounts of traffic to negotiate great rates and overcome large commitments from ILECs and CLECs.

An established wholesaler VoIP provider, such as VoIP Innovations, generally has the largest footprint with the most competitive pricing. The challenge for some of these providers is having the infrastructure, systems, and people to manage these upstream carriers. Building a BackOffice and other systems, like VoIP Innovations has done, that provides automation, ease-of-use, and scalability is the formula for success. Those who crack this code will succeed. Those who do not, will not last long in the competitive wholesale VoIP arena.

Tags: Telephony, Technology, VoIP, Telecom, Entrepreneurship

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