Build A VOIP BUSINESS PLAN! ISP VOIP Business Opportunities Explained...

Executive Summary of Your VoIP Business Plan!

REVENUE SPREAD SHEET FOR VOIP SUBSCRIBER BUSINESS PLAN

Download voip_subscriber_revenue_model.xls

Internet connectivity providers are an ideal source of both client bases that would adapt VoIP and or firms which could easily bundle their service with VoIP. Thus, the firm would capitalize on opportunities in the deregulated telecommunications sector. Offering VoIP doesn’t only carve out a niche for broadband, satellite and wireless providers, it increases the competitiveness of their overall offering. (Especially in remote regions) Management should consider launching VoIP in stages, firstly a test market with the appropriate technology platform, investing minimal capital in proving the model, then expanding and leveraging points of presence with additional VoIP gateways. VocalScape recommends to Broadband, Wireless, Satellite Internet Providers and entrepreneurs in developing nations to consider entering in the VoIP business.

Voice over IP is a new service offering based on passing conversations over the internet connection. Firms such as Vonage, Packet 8 and various other small players in the market have decided to deploy these services primarily from broadband clients. The services generally include:

-          DIDs (Telephone numbers for residential and or business clients)

-          Popular PBX features (Such as Voice Mail, Forward, Follow-me)

-          Prepaid Accounts and Unlimited Calling Plans

-          Softphone application usage for VoIP PC to Phone or PC to PC calls

-          Web based click – to – talk applications for website to phone communications

VoIP is more than an alternative to the traditional phone service; the traditional long distance- telephony reduces the investment by government and businesses to offer VoIP services using communications via Internet Connection signalling versus the public switch telephone network until the last mile. The offering has a wider appeal to new markets and rural areas and a cost saving perspective for dense metropolitan areas.

The Voice over IP market is new and business models are only now maturing. Business Opportunities in VoIP exist for those who can choose an equipment provider, launch a business relatively quickly with appropriate billing, stability, and package offerings. As a company, choosing VocalScape to develop the network and services is a relatively easy decision to make as the full functional features of a VoIP business exist in their turn-key VoIP Business Cluster. Service providers using their models typically design several service packages targeting specific regions, ethnic backgrounds, businesses, or general populace. Service packages which are bundled into their connectivity packages or offered in partnership with existing infrastructure. The VocalScape System can authenticate and run minutes for both H323, SIP in all of these situations:

- Business PBX

- VoIP adapter devices

- VoIP Softphones

- VoIP Hardware and Phones (Such as AASTRA VoIP Phones)

The system has been tested to capacities that allow for peace of mind when competing on the basis of service quality, support, interoperability, pricing, and user-friendliness. As an industry of choice service model, Netfone, Click Communications of Greece, IPCaller, and several service providers have chosen VocalScape after rigorous research to identify the best vendor, reliable scalable, and easy to work with. An important desciding factor is that the licenses for the service are not cost prohibitive for growth and ensure the Service Providers have plenty of margin for a fast return on investment. With over 40 years experience in the telecommunications industry and VoIP within the VocalScape staff, best of business practices and advice are offered from the beginning which is critical for the success of a VoIP business and ensures appropriate measures are taken to mitigate risk.

Risk that is related to:

-          tracking

-          billing practices

-          security

-          stability

Risks that VocalScape confidently overcomes with a tried and tested product in production situations for over 10,000 users. Choosing the provider is important as the solution needs to be adaptable and easily upgraded for next generation solutions. Within the best practices, the solution provided can handle home and corporate solutions, advanced billing for termination, allowing different pricing packages and rate plans for various models. Distribution of the service is important, similar to internet connectivity, word of mouth and partners generally are the number one distribution channel. Within the system is the ability to set-up resellers, partners, and affiliates into the database and provide branded solutions and hosted pages to seamlessly allow marketing of your service through the equipment purchased.

The advancement of VoIP technology has enabled a rapid deployment of the services, however, the skill to set-up a system seamlessly and integrated into a service offering is not an easy task. The necessary experience for identifying and reading service contracts by carriers, implementing plans and profitable strategies are all challenges firms should not develop in a vacuum unless they are prepared for the potential risks of doing so in lost time. VocalScape is a solution provider who wants to see their clients get the best services available, thus no previous exclusivities have been made with carriers or service providers. VocalScape assists you in finding the best routes, best DID, and best connectivity pricing if necessary. 

Often the largest challenge of using different manufacturers versus a turn-key solution provider and support team is when the interoperability between systems is not foreseen and the deployment time lengthens the time to launch due to the need to place codec conversion systems into the network. VocalScape’s turn-key system is a converter of codecs and thus immediately alleviates these concerns. In addition, the system can offer a business for providing a hosted switch solution to other providers. As a company you would be able to solve the protocol conversion problem between carriers between SIP and H323 for example.

1. Eliminate equipment costs for conversion

2. Quick to market implementation

3. Lower overhead costs due to PC based equipment

4. Integrated billing and customer satisfaction tools

Few firms can offer this level of flexibility in one consulting and system agreement.

A typical Implementation of a VocalScape Turn-Key cluster includes the following:

1 Database server

2 Web Server

3 VoIP Soft Switch

4 Configuration of interfaces and VoIP billing functions

5 Addition of modules for VoIP calling card business platform

6 Addition of Click-2-talk functions

7 Implementation of Soft phone modules

8 Implementation of Reseller software module

9 Remote installation based on IPs obtained by client

Client Obtains:

1 IPs for hosting the system and collocation facility

2 Carrier contracts and service package creation

3 Arrangements to supply VoIP hardware or Software from 3^rd party vendors (Phones, PBXs, Adapters)

Optional:

VocalScape can supply extended support packages on a yearly billing basis.

The following information can easily be used for developing the introduction to a VoIP Business Plan for your firm. Feel free to use the information as listed.

What is the VoIP Revenue Model Equation?

# VoIP Subscribers *(Fee) + Minutes Used Outside of Plan *(Carrier Cost – Retail Minute Cost)+Add On Services Fees *(Subscribers)

MINUS

Monthly connectivity and collocation costs and Bandwidth + support costs per subscriber + cost per acquisition + $10 a month per DID unlimited calling in US and

Canada

*(# of Subscribers)

(In some cases the DID is considered a cost such as a flat rate of $10 for unlimited calling per month in the US, this would be seen as a cost to the provider of $10 and factored in. For simplicity this model has been used in this equation, however in other cases DIDs can be purchased at $2.00 per month and $0.001 per minute as an alternative billing model. This could drastically improve profits but still posses an unknown risk that averages out based on the assumption clients will not exceed 8000 minutes. We prefer the flat rate, however, the average caller will make and receive 2000+ minutes per month or $2 additional per DID based on per minute rating. Making the average DID cost only $4. However, one malicious client who runs several 100,000 mnutes could quickly cause financial woes to a new firm.)

Based on this equation here are some exact numbers.

Assuming 500 subscribers, making 500 minute outside of the flat rate for $0.15 at the cost to your firm of $0.1275, using at least one add on service of $3 per month and DIDs being sold at $5 per DID with the cost of $2 per DID and 0.001 per minute.

Assuming monthly connectivity costs and hosting of $2,000 per month and Support costs of $3,000 per month for an employee and marketing of $5,000 a month.

(500 *24.95) + [500 * 500 * ($0.1275 - $0.15)] + (500* $3.00)

MINUS

(500 * $10) + $2,000 + $3,000 + $5000

or

($5625 + $12,475 + $1,500) - $15,000 = $4,600 a month profit

The ideal situation would be to lower the overall costs of DIDs per month. Some providers can lower this cost from a whole sale industry point of view to $8.00 unlimited calling. This rate increase profits by roughly 7% or $1,000 a month.

These numbers are much higher for the business client, where by the return on investment is higher due to more out-of-plan calling, subscriber services, and  potentially higher subscriber fees. This is based on a residential number and effectively offers a much higher return on investment with mixed business and domestic clients. The $3,000 a month support cost is an important factor as an individual would need to be in contact with the clients for the purpose of dealing with firewall and modem complications associated with various hardware’s used in the industry. On-going support of this problem is to be expected in this business model.

On average the following is a forecast for return on investment within the VoIP industry:

In a geographical region of 100,000 inhabitants the following is an average conversion and return on investment model for the first year of operations:

REVENUE SPREAD SHEET FOR VOIP SUBSCRIBER BUSINESS PLAN

Download voip_subscriber_revenue_model.xls

To take full advantage of this model for your business or entrepreneurial venture, please contact Ryan Gibson at VocalScape, 1-866-456-voip or gibson@vocalscape.com.

Comments

[Darryl Harris]

Dear Sirs,

I am interested in perhaps starting a voip internet business. I was contacted by a phone solicitor who wanted to "set me up" with a 3% residual income, webpage access, etc... Can you help me with this business opportunity.

Regards,

Darryl Harris

[Asad ali]

I am interested in perhaps starting a voip internet business. Please help me in this regards cost wise and installation wise.

Regards,

asad

[saqib]

Hi All,

I am residing in UK and I've very good/ cheap rate to terminate traffic to Pakistan.
If anyone interested, please drop me email at itservices.london@gmail.com

Thanks,

Saqib