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

Kristian Kielhofner kristian.kielhofner at gmail.com
Mon Jan 5 13:14:33 CST 2009


On 1/5/09, Alex Balashov <abalashov at evaristesys.com> wrote:
> Nitzan Kon wrote:
>
>  > Servers are cheap. These days you can build a nice server
>  > well under $500. Colocating them is also cheap if they're
>  > in 1U form, and bandwidth is really not that expensive if
>  > you shop rates.
>
>  That really depends on the situation.  Sometimes colocation options
>  present themselves at undesirable price breakpoints:  for example, if
>  you're paying a per-U (per-machine) rate but have more than a few
>  machines, you might get a much better per-U deal buying a whole cabinet
>  or half-cabinet but have to be out that cost without enough machines to
>  really justify it.  That kind of stuff.
>
>  Secondly, this is a low-margin business, and will only get more so.
>  Minor-seeming expenses like power and additional servers can add up to
>  an unacceptable per-port cost, and depending on the price breaks, you
>  can experience a regression in gross margins as you grow further to a
>  certain point.
>
>  Thirdly, the bandwidth is not cheap -- at least, not good bandwidth.
>
>  A G.711u call takes about 80 kbps on the inbound media stream and on the
>  outbound one once framing, padding and L2/L3 headers are factored in, as
>  you well know.  A decent server doing Asterisk can handle a few hundred
>  calls, so with every additional server doing 300 concurrent calls you
>  are driving about an additional ~25 mbps in sustained bandwidth!  I mean
>  sustained, not burst below the 95th percentile.  If you are paying, say,
>  $40/meg on your commitment, as opposed to burst overages, that's another
>  $1k/mo to handle another 300 calls, plus the amortised expense of a new
>  $500 server.
>
>  If you're doing usage as opposed to some sort of flat-rate subscription
>  scheme, that presumably means you have high sustained concurrent usage
>  if you want to make any money.  If the users are paying an average of...
>  say, as much as 1.5c a minute, and you're paying, say, 0.9c wholesale
>  (which is generally a very decent margin for an ITSP), and you're doing
>  about 5 million minutes a month - which is generally quite ambitious for
>  a small VoIP ITSP - then you're pulling in about $20k/mo.  But that's
>  160,000 minutes/day, which seems to require an average of ~110
>  concurrent calls to be up at any given time.
>
>  If your margins are that good (half a penny a minute) then you can
>  probably afford to screw around.  Unfortunately, for most VoIP ITSPs the
>  margins are much thinner, especially for wholesalers in domestic US48
>  LD.  If you're making 1/10th of a penny, you're only doing $5k/mo on 5
>  million minutes.  Out of that $5k you've got to pay your total colo
>  expense, your marginal bandwidth cost on 110 calls (10+ meg commitment),
>  power, salary, and all other business expenses.
>
>  $.001 is a lot closer to the margin many ITSPs are making than $.005.
>

Thanks for the math.

My answer is much simpler:

Why would I *increase* my costs to almost certainly *decrease* my
customers quality?

This isn't always the case but it usually is.  If proxying the media
improved quality (it sometimes can) then it would be worth the extra
costs associated with it.  Otherwise it's usually a lose/lose.

-- 
Kristian Kielhofner
http://blog.krisk.org
http://www.submityoursip.com
http://www.astlinux.org
http://www.star2star.com



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