White Label Communications Blog

Private Label SIP Trunks - A $2 Billion Market

Posted by Chris Griffith on Fri, Nov 09, 2012 @ 09:22 AM

SIP (Session Initiation Protocol) technology is turning out to be the best investments for any company wishing to be a service provider.  There is a lot of literature concerning this technology, but still, it is somehow complex to understand especially for newbies to the field of telecommunication. Generally, Private Label SIP trunks are a voice services perfect for companies that operate with high levels of data and voice traffic.

The main reason as to why most business operators are embarking on this system is that it maximizes investment returns in network infrastructure since it only requires one network connection for both data and voice. Additionally, it is the cheapest and easiest way to integrate VoIP into existing communication systems. The rampant use of SIP trunks across the world calls for more companies to act as service providers in order to meet the increasing demands.

Another reason why businesses are embracing this system is that SIP trunks grow as the business grows since all call travel via IP network that is bound to grow as your business expands. With SIP trunks there is no need for regular DIDs for making outgoing calls, DIDs are only required for receiving calls from the regular telephone network. In addition, there is not limit on the number of calls staffs can make.

private label sip trunksPrivate Label SIP trunks, the best Investment

Becoming a Private Label SIP trunks provider is probably the best decision for anyone in the telecommunication industry. This is evident by the revenue earned by SIP service provides of the North America. According to the Frost & Sullivan program director ELka Popova, these SIP and VoIP trunking providers earn roughly $2 billion as their revenue. He is also keen to note that user based SIP trunking and VoIP access increased at a rate of 65.5% to reach approximately 7.2 million users in the year 2010.

According to the Frost & Sullivan study, the industry is expected to have a tremendous annual growth rate of approximately 35% by the year 2017. This would mean that the users would increase from 7.2 million in the year 2010 to 59.1 million users come 2017. Although, in this business, it is hard to describe medium or small business IP telephony and SIP trunking revenues currently, organizations with employees less than 500 (small businesses) are the ones responsible for 85% of sales generated.

The study by Frost & Sullivan includes only basic VoIP access. However, their forecast does not put into account things like, Centrex IP, Time Division Multiplexing Centrex and IP telephony services. It generally includes both integrated access (aka IP telephony access) and SIP trunking, which are vital qualifications for their forecast.

Another research by the Infonetics group claims that one of the most commonly used trunking service is the T1 lines. They point out that come the year 2013 these T1 lines will still be popular. Infonetics also estimate the SIP trunking service revenue to businesses to grow at an impressive rate of about 52% CAGR (compound annual growth rate) within a period of four years (2011 - 2015). This suggests that the estimate growth rate by Frost & Sullivan includes both converged access and SIP trunking hence investing in private Label trunks would be a wise Idea.

Typically, in SIP trunking and VoIP access, the service providers are supposed to provide long distance calling, limited set of call-management, local dial tone and control features as indicated by the Popova study. Additionally, the research pinpoints that most cooperates in this industry are embarking in building SIP trunking with a wide range of network-based communication capabilities and applications. Some of these applications include Unified messaging, fixed mobile coverage, voicemail and hosted auto attendant and many more.

On the contrary, this field has not grown faster as one would expect. The explanation of this gap is highly complex and hard to explain as noted by the Frost and Sullivan research. However, it can be attributed to the lack of support to clients from the Private label SIP trunks service providers and that some bigger enterprises are too hesitant in buying from small service providers. Also at times, the service agreement level between the two parties is just not right.

In conclusions, the private label SIP trunks are truly a $2 billion worth market and more as evident by the two research groups. As the studies indicate, there will be rapid progress in the number of consumers, in the near future. This will create a vast opportunity for companies (ranging from small to large enterprises) wishing to serve as service providers. However, these companies will be required to address the current problems faced by consumers for them to stand out in the market competition. It is only by doing so that they will realize the full potential of the market.

Topics: sip trunking, reseller program

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