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Purchasing Wholesale SIP Termination: Benefits and Pitfalls

Posted by Sebastian Kiely on March 26, 2015 at 3:21 PM

In this feature we will discuss some of the benefits regarding purchasing wholesale SIP termination as well as some of the potential pitfalls. As the individual responsible for managing vendor accounts at VoIP Innovations I have had the pleasure of working with a variety of different carriers in the VoIP wholesale termination space. Through these experiences I have learned a great deal about the market and some of the things to try and avoid.

Simply put, the wholesale SIP termination space is a diverse. You will encounter some companies that have aggressive pricing and others that have more conservative margins. You will deal with companies that do a great job of completing calls as well as those who do not. Some providers will give you a rate deck and complete the vast majority of your calls and some will reject half of what you send. Phone in Woamns Hand Wholesale Sip Termination

The challenge is building a system that leverages the benefits and security of solid, conservative players while at the same time augmenting those providers’ coverage with ones that have more aggressive rates. It is through this blend that you can establish a termination platform that completes all calls and does so while keeping margins in the black.

So how does one go about choosing the right SIP termination partners? There is no single answer, but several things you can do to make the right choice. At VoIP Innovations we developed a process called “RATA”; Researching, Analyzing, Testing, and Accountability. This is not some complicated formula, but rather a simple outline to reduce the risk and time you spend when choosing a wholesale termination carrier.

Research is often times the most important and challenging of the four steps because sometimes it is hard to differentiate legitimate providers from those who are less capable. Fortunately, I have had the privilege of working with a handful of great providers with our sister company, GlobalPOPs and have been able to leverage those relationships for VoIP Innovations. When you start exploring the market, what you will find is that many of the large players from the traditional wholesale telecom space are also the top of the list as far as SIP termination today. Outside of those familiar names there are also a good amount of solid, emerging companies that may not be household names. Do your research online, look for vendor reviews, and most importantly see what others in your space are doing for providers. Wholesale Sip Terminationcons Smudge Finger Camera

The second step for vetting a potential vendor would be Analysis.  You are speaking with a sales representative at the particular provider, you have executed an NDA, and you are ready to see what they can actually do. Generally there are two ways to go about getting the best possible rate from the provider as it relates to your LCR. You can ask them for their most aggressive pricing and trust that it is or you can provide them a weighted target file. The weighted target file is my preference because it shows the provider what rate they need to win the traffic for each particular destination. If the provider knows what they are doing they will be able to quickly analyze this information and provide you with a custom deck that fits your traffic patterns and cost structure.

Once you’ve established that the rates from the provider are worth using in your LCR it is now time to test the connection and the service. This testing period is called “interop” which is the act of interconnecting the two switches. Typically the carrier will provide an interop form to complete which gathers certain switching info such as an IP Address or CODEC. Once the interconnection has been established, testing can begin. Although there are a number of tests to ensure proper functionality, nothing beats live traffic. Unfortunately, if there are issues when using live traffic, your customers can feel the pain.

That leads us into the last part of RATA which is accountability. When a new carrier is added, they need to be held accountable for underperforming. It is important that you are able to check for completion percentage, PDD (post dial delay), and many other performance metrics. In general if a provider gives you a rate deck, they should be able to complete the vast majority of the routes in that deck.  We like to work with our providers to resolve any issues after integration, but performance is paramount and a string of failure is generally an indication that you should disable the vendor and potentially end the partnership.

Managing a wholesale SIP termination platform requires daily care and feeling and careful interpretation of performance data. Without that data at your disposal you will feel like you are driving a car without being able to see over the dashboard. Rates change on a weekly basis and the market is in a constant flux so staying on top of vendor cost and performance is incredibly important.

Wholesale SIP termination is a tricky market but if you feel you are ready to tackle it on your own you might consider developing a system like “RATA” for yourself.  If you aren’t at that stage but still want to benefit from the lower pricing of an LCR, there are middle market aggregators that have done much of the work for you. While you won’t get rates as good as someone who goes directly to the larger providers, you will have taken a lot of the work out of the equation and if you are small enough the difference in cost will be negligible. 
Wholesale Termiantion White Paper

Tags: Entrepreneurship

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