[asterisk-biz] Experimental/new VoIP rate search engine.

[Alex Balashov]

Kristian Kielhofner wrote:

> On 1/4/09, Alex Balashov <abalashov at evaristesys.com> wrote:
>> I think if this gets traction you will see a lot of providers doing
>>  ultra-low bait-and-switch rates. Most cannot afford to be in a price
>>  race to the bottom.
>>
> 
>   Agreed.
> 
>   This current race to the bottom, while somewhat inevitable, is not
> necessarily a good thing for customers.

There are presently very substantial differences between wholesale 
trunking providers based on who they buy from, what type of Internet 
connectivity they have / how they are peered relative to Tier 1 Internet 
backbones, what equipment they use, and the jurisdiction in which they 
operate and associated regulations.

But, in the end, I think as some of this stuff gets to be normalised and 
evens out as the industry matures and networking adapts around it, VoIP 
termination and origination *will* become a commodity and the market 
will resemble perfect competition much more than it does today.  That 
doesn't mean that small differences won't remain, that value-added 
features or platforms won't have an impact, or that fly-by-night 
operations will be tolerated, but in the grand scheme of things, the 
substantive business-level differentiators will be on the carrier side, 
where the cost basis can differ depending on how much network the 
competitive carrier actually has versus pure interconnection with an 
incumbent + wholesale long-distance via an IXC, or the equivalent 
concept in non-US markets where some degree of local loop deregulation 
also exists.

In other words, wholesale termination and origination *will* start to 
look more like the market for agricultural products (wheat, grain, corn, 
fruit, rice), basic industrial inputs (steel, screws, bolts, molds), 
energy (oil, electricity, natural gas), precious metals (gold, silver, 
etc.), etc.  This is one in which price and its relevance to logistics 
is the only pervasive and ubiquitous value differentiator.

That's not necessarily a bad thing if the stuff that differentiates the 
offering really can be factored out.  Increasingly, with time, I think 
it will be.

The bad news for pure VoIP ITSPs anyone doing PSTN connectivity 
arbitrage or engaging in a variety of other resale models is that the 
ones with anything less than the most viciously competitive pricing will 
be forced out of the market--that's assuming that selling "minutes" will 
remain the network and/or facility monetisation model once the industry 
finds a solid private VoIP peering and settlement model and stands 
anything to gain from seriously beginning the process of deprecating the 
PSTN.  We can agree that's not exactly around the corner right now, 
except perhaps in places that never had much fixed-line infrastructure 
to begin with.

The good news is that substance (aka actual network build-out) will be 
rewarded over resale and arbitrage.  Network build-out is capital 
intensive but adds actual value in the long run.

-- Alex

-- 
Alex Balashov
Evariste Systems
Web    : http://www.evaristesys.com/
Tel    : (+1) (678) 954-0670
Direct : (+1) (678) 954-0671
Mobile : (+1) (678) 237-1775