IT Brief New Zealand logo
Technology news for New Zealand's largest enterprises
Story image

Why VoIP resellers become service providers

Fri 3 Jul 2015
FYI, this story is more than a year old

The chain of a long distance call usually involves few levels of service providers (tier 1, tier 2 and tier 3) that are responsible for transferring a call to another carrier (wholesale) or the end user (retail). Providers that are working in the retail market have two options – deal with the users directly or organise their sales channels through resellers. This article will explain the difference between operators and resellers and why part of them are streaming to become service providers.

The difference between resellers and service providers The terms 'reseller' and 'service provider' may be understood differently, so first let me explain the characteristics of typical resellers from my point of view. They are individuals or organisations that work like the agents of some provider (usually on a commission basis) or as the sales partners under their own brand (also called white-label). White-label resellers have own customers and apply individual tariff plans which are different from their core provider’s. The VoIP traffic and DIDs (if needed) are obtained from the main provider at the wholesale price. Resellers do not have their own infrastructure and they are managing their operations (registering new clients, applying the rates, putting the profit margins, monitoring calls, reviewing statistics, etc.) through the online portal which is supplied by their provider. The main operation which differentiates reseller from the provider is the ability to manage own carriers. Providers have own switching system (also called, a softswitch) and the full control on it, whereas resellers have just an access to the online portal. The reason of this is that VoIP traffic is the main revenue stream for all providers and they are not interested in creating a competition for themselves. However, some providers offer an additional service – switch partition which allows resellers to add own carriers by paying a small monthly or per minute fee.

Why is it worth being a reseller? To tell you the truth, if I started the VoIP business from scratch, I would definitely choose the reseller level. The reason of this is very simple - resellers need minimal VoIP technical knowledge as majority of their operations are commercial. Moreover, resellers don’t need to invest to VoIP equipment which allows to start a business easily with the minimal risk and concentrate on the core activities that drive a business forward - marketing and sales. So the main task is to find a good, competitive service provider that would take care of everything and would allow reseller to start the business and generate profit from VoIP services.

Why some resellers move to the higher level Imagine a company with an ambitious and insightful employee who understands that his or her organisation should do things differently in order to grow the business. However, if such opinion does not match the vision of the employer, the employee may leave the organisation and start own business. It works in a very similar way if you are a VoIP reseller. Sometimes resellers start feeling the limitations of their position. First, they do not have enough control on the business – the price and quality of calls depend only on their provider. Second, it is quite hard to deal with the clients when there’s no influence to fix a problem which was caused by provider (e.g. the core system is down, the line is breaking, the long distance rates are becoming too high, etc.). The only thing reseller can do is to report the problem to the provider and wait till it is fixed. Third, the needs of reseller’s clients may change fast and the core provider may not be so flexible to fulfill them all. Or, in some cases it is just not worth making the changes if the reseller is not a key partner for the operator. In the end, resellers experience a lack of independence and freedom to make own decisions. This is a key factor which encourages them to starting thinking about having own business and becoming the service providers. 

Conclusion Being a provider allows full control on a business which can bring much higher revenue, but at the same time, there are additional responsibility and risks, related to this. Providers must have the ability to manage a complex telecom infrastructure on commercial and technical levels, which means that only experienced and skilled people can work there. Moreover, having the own infrastructure means there’s a need for a higher investment to start a business and more cash flow is required to cover the monthly expenses.

To summarise, I’d say that the best practice is entering VoIP business from the starting level - being a reseller. If there’s a big demand and high potential to expand, it is worth considering being a service provider with own equipment.

Sign up in http://www.runvoipbusiness.com to get useful VoIP tips and follow the news about the book “How to Start and Run VoIP Business”.

By Vilius Stanislovaitis VoIP Business Start Consultant, VoIP Softswitch Expert

Related stories
Top stories
Story image
Low-code
Video: 10 Minute IT Jams - An update from Mendix
Mendix is a low-code platform used by businesses to develop mobile and web apps at scale, and Jornt joins us today to discuss how these offerings work, and what benefit they have in the development process.
Story image
Artificial Intelligence
Appier achieves historically high growth rate of 56% YoY
"Our strong momentum over the past two quarters underscores Appier's significant growth alongside our customers."
Story image
Lucid Software
Lucid Software expands enterprise offerings with enhanced slack apps
Lucid Software has expanded its enterprise offerings with enhanced slack apps for its Lucidspark and Lucidchart technology.
Story image
Malware
Kaspersky uncovers new attacks by advanced persistent threat group
The attacks involved modifications of the well-known malware, DTrack, as well as the use of a brand-new Maui ransomware.
Story image
Biometrics
Can biometrics help? 123% increase in Gen Zs scammed online
In the three years leading up to 2022, the number of Gen Zs who fell victim to online scams rose by 123%, according to Ping Identity.
Story image
InternetNZ
How well do rangatahi understand cyber safety in Aotearoa?
Do rangatahi in Aotearoa understand the importance of being safe online, or has lifelong exposure to the internet resulted in widespread complacency?
Story image
Data analytics
Pressure on orgs to up their data analytics game - study
A recent report from Sisense highlights data transmission, analysis, and risk management remain top concerns for data professionals in APAC.
Story image
Artificial Intelligence
Gartner unveils key emerging tech to watch in 2022
"Such technologies present greater risks for deployment, but potentially greater benefits for early adopters," says Gartner.
Story image
IDC
High level of Customer Identity & Access Management adoption
The study from Okta revealed that the pandemic has either accelerated or highlighted the need for digital-first strategies.
Story image
Application Performance Monitoring / APM
New Relic integrates offering with Atlassian’s Jira Software
New Relic has integrated errors inbox with Jira Software to allow developers to easily access and set up complete stack error tracking and software performance monitoring from within the tool.
Story image
Microsoft
Avast reveals zero-day exploits targeting Chrome and Microsoft
Avast, released its Q2/2022 Threat Report today, revealing a significant increase in global ransomware attacks, up 24% from Q1/2022.
Story image
Developers
Snyk announces plans to expand partner network in APJ
Recognising that partnerships are critical for growth, Snyk is building an entire partner ecosystem that will drive its expansion across APJ.
Story image
Tech job moves
Tech job moves - Fastly, INX, Kinly, SmartBear & Vectra AI
We round up all job appointments from July 29 - August 12, 2022, in one place to keep you updated with the latest from across the tech industries.
Story image
Gartner Magic Quadrant
Gartner names Lookout a Visionary in 2022 Magic Quadrant
Gartner has recognised Lookout as a Visionary in the 2022 Magic Quadrant for Security Service Edge (SSE) and one of the top three offerings in the 2022 Gartner Critical Capabilities for SSE report.
Story image
Cyber attacks
Dramatic uptick in threat activity with exploits growing nearly 150%
"While it’s not a surprise given increased attack opportunities like remote work, it’s still a worrying development and one we cannot ignore."
Story image
Firewall
Why printing security plays a vital part in keeping Aotearoa safe
While internet printing, mobile printing and other similar technologies have no doubt made things easier to manage, it has also brought a whole new set of problems to the table.
Story image
Privileged Access Management / PAM
The importance of stopping identity sprawl for cybersecurity
The 2021 Data Breach Investigations Report (DBIR) shows that 61% of all breaches involve malicious actors gaining unauthorised, privileged access to data by using a compromised credential. Unfortunately, it is often too late when the misuse of a credential is detected.
Story image
Surveillance
Ministry will no longer accept equipment from Chinese firm Hikvision
The Ministry of Business, Innovation and Employment (MBIE) says it will no longer accept equipment from a major Chinese surveillance camera maker.
Story image
Dicker Data
Dicker Data brought on as Acronis partner for A/NZ
The news about the partnership comes in as cyber criminals continue to exploit gaps in traditional solutions and strategies in NZ and across the APAC region.
Story image
Ingram Micro
Ingram Micro NZ sees $74 million revenue growth in 2021
Ingram Micro New Zealand's latest financial report reveals that its revenue from contracts with customers increased by almost $74 million in 2021.
Story image
Cloud Security
Tenable makes additions to Cloud Security portfolio
Tenable has announced additions to Tenable Cloud Security that represent the next step in assessing threats related to cloud vulnerabilities.
AWS Marketplace
Learn how security orchestration, automation, and response (SOAR) enhances your security strategy.
Link image
Story image
Augmented Reality
TeamViewer remote access software integrated into RealWear Cloud
TeamViewer has announced a major expansion of its partnership with RealWear, a leading provider of assisted reality wearable solutions for frontline industrial workers. 
Story image
Artificial Intelligence
Is your chatbot bringing down the customer satisfaction score?
The top 10 reasons why chatbots are failing to meet customer expectations and what you must do to avoid that.
Story image
Compliance
Why security needs to shape your journey to the cloud
It's estimated that 80% of workloads could be in the cloud in the next few years. How can you make all that data secure?
Story image
Cybersecurity
Education sector seeing highest volumes of cyber attacks
When breaking down the numbers to education attacks by region in July 2022, A/NZ was the most heavily attacked.
Story image
DevOps
Dynatrace extends application security capabilities for runtime environments
Dynatrace has announced that it has extended its Application Security Module to detect and protect against vulnerabilities in runtime environments.
Story image
Digital Transformation
Top tips for making your finance transformation program a resounding success
Planning to make 2023 the year you embark on a wholesale finance transformation program? It’s a move that will stand your enterprise in excellent stead as you navigate the complexities of the post-Covid business landscape.
Story image
SaaS
Exclusive: The Access Group shares the benefits of embracing SaaS
In today's rapidly changing working environments, efficiency and productivity are surefire ways to create business growth and success.
Story image
Distribution
Garmin expands NZ footprint with new Auckland distribution centre
The facility at Goodman’s Highbrook Business Park will be fully operational from October 2022 and features 3,586sqm of warehouse space.
Story image
Infrastructure
IBM expands Power10 server line for business modernisation
IBM has recently announced a significant expansion of its Power10 server line with the introduction of mid-range and scale-out systems.
Story image
Servers
New Zealand cloud provider challenges Google's claims on data control for region
A Wellington cloud services provider says Google's claim it will offer New Zealanders complete control over their own data is not true.
Story image
Indusface
Why enhancing bot protection for web and API endpoints matters
The trouble with bots is that they aren’t all bad. Unfortunately, this can make it challenging to detect malicious bots that find their way into your system and threaten your business.
Story image
Hybrid Cloud
The essential guide to digital transformation by SolarWinds
Digital transformation is a buzzword thrown around all the time by companies, but what does it actually mean and why is it important? SolarWinds breaks it down.
Story image
VMware
Latest VMware threat report reveals truth about deepfakes
"Cyber criminals have evolved. Their new goal is to use deepfake technology to compromise organisations and gain access to their environment."
Story image
ExtraHop
Organisations exposing highly sensitive protocols to public internet
More than 60% of organisations expose remote control protocol SSH to the public internet, while 36% of organisations expose the insecure FTP protocol.
Story image
Cybersecurity
Datacom research explores reality of zero trust in A/NZ
Zero trust is fast emerging as global best practice in cybersecurity and local leaders are on board, with 83% considering it essential to security.
Story image
JLL
Investment in APAC cold storage to reach $5 in next decade
Investment in Asia Pacific’s cold storage market is expected to grow fivefold in the next decade, according to JLL.
Story image
Enterprise Resource Planning / ERP
Why the right ERP (and partner) is crucial to an innovative and successful business
Enterprise Resource Planning (ERP) is a foundational step to ensuring a robust business model; here's why choosing the right one could be vital to ensuring long-term success and innovative results.
Story image
Data Protection
Advancing genomic sequencing and public health with digital infrastructures
Right before our eyes, we've witnessed the development of the COVID-19 vaccine in record time. An enormous achievement in an otherwise lengthy task that previously took, on average, 10-15 years.
Story image
SaaS
Cloud and data protection big challenges for NZ businesses
"This surge towards a cloud-first approach meant security and safety became afterthoughts - there's no point being the fastest car on the racetrack if you crash.”