At Alianza, we regularly repeat this mantra to new internet service providers (ISPs) entering the market. Even without a background in voice services, phone service portfolios built for VoIP to FTTH can help these businesses grow revenue, accelerate ROI, and deliver a better customer experience.
Rural electric cooperatives (RECs), municipal providers, and new overbuilder ISPs all fall into this category of communication service providers (CSPs) actively building broadband networks for rural and underserved communities.
If you’re not already offering white-label VoIP over your fiber broadband infrastructure, you should be! Here are three reasons why VoIP to FTTH solutions support both your business operations and revenue streams:
To this day, fixed voice remains a huge piece of the telecom market. As of 2019, there were still 116 million wireline phones in the United States, the majority of which were VoIP. In fact, VoIP lines grew 38% from 2013 to 2017, and they’re still growing. As more residential and business customers make the move from VoIP to FTTH, fiber broadband providers can benefit from this market demand.
By 2020, 43.5% of US households subscribed to VoIP services, an 8.9% increase from 2013. This number represents a significant margin-rich revenue boost that ISPs are potentially leaving on the table without a VoIP-to-FTTH-enabled voice offering. New fiber connections carry ample bandwidth for multi-play delivery, which makes them an advantageous choice for an increasingly broadband world.
While VoIP has been around for two decades, small to medium businesses (SMBs) are still largely stuck on legacy, time-division multiplexing (TDM) solutions. Over 60% of businesses plan to cut down on their traditional phone lines. Newly launched businesses will no doubt choose IP-based systems from the get-go.
According to a Heavy Reading survey, service providers continue to see value in offering voice since it tends to broadly win them customers. In fact, 81% said that having voice in their portfolios actually helps drive adoption and growth of other services. Clearly, voice still holds a lucrative place within broadband markets.
Many US households still view phone service as a critical offering. Logically, then, CSPs — both new and established — can leverage voice to maximize revenue and satisfy select customer demand.
In competitive markets such as telecommunications, service bundling is a key strategy that fosters loyal subscribers with higher overall lifetime value. As of 2022, 40% of broadband households bundle more than one service from a single provider.
Offering bundling options for SMBs is even more critical. Many companies won’t even consider switching ISPs if no VoIP solution is available. In many cases, ISPs will need bundled services to win new business and sustain take-rates in increasingly competitive markets.
Fifteen-plus years ago, cable MSOs and some internet over-the-top (OTT) players shook up the voice market by offering VoIP with useful new features and cheaper out-of-pocket costs for customers. New ISPs can accomplish this same goal, especially in places where plain-old-telephone-service (POTS) plus DSL is the only real viable option.
While there is demand for ultra-broadband powered by FTTH, this technology comes with a major price tag. Costs-per-home regularly clock in at $500 or above, particularly in rural communities. By offering add-on services that boost ARPU, VoIP can actually accelerate the ROI earned from fiber builds through margin dollars and a better bottom line. With the right VoIP to FTTH solution, fiber providers can expect 60–80% margins while advertising competitive prices to consumers.
Admittedly, some CSPs are not properly equipped to capitalize on this opportunity. In some cases, the ISP may lack needed expertise or capital to build a VoIP network, and certain business cases or operational models may not even have a compelling reason for white-label solutions.
Alianza’s cloud communications platform complements fiber broadband services with easy to manage, easy to consume, and highly profitable VoIP to FTTH solutions. This solution makes sense for providers that:
- Do not currently have a VoIP softswitch or white-label hosted voice solution.
- Lack rate center coverage aligned with the new fiber footprint.
- Cannot compete against other broadband providers because they don’t have an appropriate cost basis.
- Currently manage an obsolete softswitch system.
Want to dig deeper into the VoIP opportunity for fiber broadband providers? Learn more in our eBook Got Fiber? You Need VoIP!