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How VoIP Has A Major Positive Effect On ROIs For Service Providers


Summary: Multi-faceted VoIP technology has brought in its wake many different opportunities for service providers to monetize their operations.

When the internet started in the 1960s and then went mainstream by the 1990s few would have foreseen that it would become the backbone of voice communications. Transport control protocol takes are of delivery and computers in the network find each other through the Internet Protocol (IP) address which is foundational to the internet. Back in those days the internet was slow but with the rise of high speed networks and broadband VoIP or Voice over Internet Protocol began to be used on a wider scale. Today, VoIP is fast on its way to rendering standard PSTN networks obsolete. Rise of VoIP saw the rise of carriers and service providers using class 4 softswitches and class 5 softswitches for interconnects and routing of voice packets across local and international networks. The multifunctional features of VoIP help service providers to offer a variety of communication services and keep increasing their revenue streams even as they draw in more customers due to lower costs and better features.

VoIP Positive effect on ROIs of Service Providers

Back in the days of PSTN telephone voice service providers were limited by the capability of the technology. There was very little they could do beyond charging for local and international calls for the general public. ISDN provided another revenue stream. VoIP brought about a sea change. VoIP supports voice, data and media packets. Service providers offer a range of VoIP based services such as

  • Cloud IP PBX
  • Cloud Call center solutions
  • Video
  • Text, voicemail, email, Fax over IP (FoIP), IVR
  • WebRTC solutions
  • Retail and resellers
  • Class 4/5 softswitches

Service providers have the option of building their own infrastructure, working as resellers and opting for hosted white label solutions. The last is by far a better option, especially for startups that wish to dive into the lucrative and growing VoIP services market. Even existing service providers with their own VoIP hardware infrastructure can improve ROI by expanding scope of service through hosted software solutions as shown above. Apart from serving small and large businesses they can also rope in resellers at retail and wholesale level to further widen reach and generate more revenues.

How VoIP works

VoIP makes use of the TCP/IP feature of internet to encapsulate audio into data packet and then transmit it through the IP Networks where the recipient at the other end has suitable hard/ware to unencapsulate voice packets. Class 4 softswitches take care of bulk voice traffic whereas class 5 softswitches kick in when connecting to local numbers through local exchanges.

VoIP makes use of G.711 and G.729 codecs. G.711 transmits uncompressed packets whereas G.729 codec handles compressed packets. Apart from these two there are diverse codecs in use across the world and varying coding standards. Class 4 softswitch also takes care of transcoding. Service providers include session border controller that handles media transcoding in a far better way while providing better security. Once voice is transformed into packets and encapsulated into IP the real time transport protocol kicks in. A session initiation protocol usually takes care of creating, maintaining and ending calls.

Callers may use special IP based phones that connect to the internet through a router. They may use the phones to make and receive calls. Then there are software based IP phones installed on computers or mobile devices as is seen in call center environments. WebRTC takes it even further by doing away with the need for IP since communication is enabled through a browser. A desktop computer or a mobile phone with internet connectivity is all you need for VoIP telephony.

The standard revenue model for service providers is to provide the infrastructure in the form of class 4/class 5 softswitches and session border controller and VoIP gateway with supporting software. Service providers route calls and generate revenues but that in itself is one thing. There are other ways, thanks to VoIP technologies, for service providers to increase their return on investments.

Using least cost routing to increase returns

Service providers have options with the least cost routing feature available in session border controller and class 4/5 softswitch. The devices automatically detect and route calls through available networks with the lowest cost, whether it is regional or international. The service provider can opt to pass on the reduced cost benefit to customers. Alternatively, they may charge a fixed price and let least cost routing work for their benefit by increasing their margin.

Since these functions are carried out by the class 4/5 softswitches it pays for them to choose current softswitches endowed with a measure of artificial intelligence for smart operations. The result is even more savings and better service to customers. Better customer service engenders loyalty. Loyalty translates to more revenues as VoIP service providers offer a bouquet of value added services.


Businesses small and large need an IP PBX system. These enterprises have the option of going in for proprietary or custom developed IP PBX software. It does entail investment up front that not everyone may be ready to invest in. Further, once they do have an on-premises solution they find that there are additional costs of maintenance and upgrades. This is where VoIP services can step in and offer hosted multi-tenant IP PBX solution. It is easy for them to get white label software from developers of class 4/class 5 softswitches who also offer white label IP PBX development. With this in place they can offer value added services to existing customers directly or through a chain of resellers and rope in more customers too. The white label assists with branding. Importantly, they have the freedom to set different rates for each client. Further, IP PBX software usually has a host of modular features such as:

  • IVR
  • Unified communications
  • Fax over IP
  • Multi-lingual feature
  • Mobile extension
  • Web RTC inclusion
  • CRM integration
  • Retail end

Users may have different needs. Larger enterprises may need all the bells and whistles. By designing rates on component basis the service provider can charge for each feature and add to revenues. Some features, such as WebRTC and IVR may even be offered as a standalone service if a customer so requires it.

The IP PBX may be integrated with an existing CRM in which case the service provider takes care of integration and charges accordingly.

Call center operations

Older call centers had the entire hardware setup with satellite connectivity for their global operations. VoIP helps to reduce their cost of operation and cost of investment in appropriate infrastructure. When VoIP services offer hosted call center software then the operator need not even invest in hardware and gateways. A simple monthly subscription helps anyone get started with call center operations. Enterprises that hitherto outsourced customer services can now have their own in-house contact center solutions and deliver better services. As more and more enterprises switch over to such hosted solutions the service provider keeps increasing revenues. As in contact center software, the service provider puts in place a hosted white label modular contact center solution and gets going.

Growbig (name changed) a, ecommerce operator, decided to have their own in-house contact center operations and opted for a hosted solution. The result is fast service, better quality since agents can answer all queries, more loyalty and more conversions.

Existing call centers may switch over to such service. The extreme affordability and lack of upfront investment means anyone can start such operations on a low budget and this will swell the ranks of customers for this software. Again, modular solution means service providers can grant permission or deny access to specific modules and charge accordingly. Service providers enhance revenues by roping in new customers and then through the modular components they gain value addition. The average revenue per user increases.

Video and media

One of the biggest benefits of VoIP is not just voice but that VoIP networks can transport video and a variety of media in addition to data. Skype and Whatsapp show the benefits of video chats. These are free solutions with limited capabilities or security concerns. Service providers step in and again resort to white label video and media solutions. Should a client desire to have a video chat and conferencing solution it is easy for them to add it to the existing VoIP telephone, the IP PBX or contact center software. Customers may need such video facility all the time since it comes in useful for interaction with customers and vendors. Besides, it becomes a vital collaboration tool. Revenue is there for the picking. Service providers already have the infrastructure in place. By obtaining more of white label VoIP based solutions they add to their basket of services and enhance returns with very low upfront cost.

Mac appliances (name changed) an appliance manufacturing company discovered that video and media helped in better customer interactions whether it was at a primary inquiry stage or a complaint stage. Video satisfied their criteria for service and customers enjoyed a face to face talk. Result: Loyalty and more conversions.

Of course such service providers would need the latest in class 4 and class 5 softswitches to ensure that there are no media and codec transcoding issues. Suitable SBC in the chain further enhances interoperability while assuring security concerns.

Text, voice mail, fax, email

Text, voice mail, fax and email may not directly contribute substantial ROIs for service providers but these can be used as convincing tools to induce those who are still using PSTN to make the transition to VoIP based services. That they will have omnichannel communications and unified communication in an affordable package should serve as convincing factors. Service providers will find it easy to acquire customers.

Then there are other ways to monetize SMS for example, by offering SMS broadcast software that businesses can use for their marketing and promotional campaigns. For service providers there are rich pickings in virtually every direction provided they tie up with the right software package developers to come up with white label solutions.

While on the topic, it is possible and easy to offer fax over IP and IVR as standalone services for businesses that already have an IP PPBX solution or wish to simply use these features for the present.


WebRTC is becoming a standard part of most call center software and IP PBX solutions. However, not every business has IP PBX with WebRTC. In such cases their option is to upgrade their software which may not be convenient or better still, simply subscribe to WebRTC services. It would be easy to see how and why businesses will opt for WebRTC, especially startups.

  • WebRTC works in a browser. Users do not need specialized IP Phones. A desktop with a webcam and headphone or a mobile phone is all you need for audio-video chat and conference.
  • WebRTC is inherently secure and made more secure by WebRTC solution providers who add in extra layers of security.
  • WebRTC permits one to one, one to many conferencing and participants do not need specific software to join the conference.
  • There is no need for session rehydration. Internet connection may be interrupted and then resume. Participants take up where they left off.
  • Everything can be recorded for future reference.
  • It is possible to make a presentation within the conference and share documents without breaking stride.

Take the case of Dax Software, a startup venture. The five man team opted for WebRTC as a way to stay connected with each other and with customers. Communications paved the way for closing of more deals and speeding up work.

Greco Machinery (name changed) had its office in the US, manufacturing in China and sales networks in Europe and Asia. WebRTC helped the HO to know what was happening in their manufacturing unit and connect sales with production and with service networks.

In a way WebRTC is compellingly indispensable for enterprises. It finds use in chats with customers, vendors and for conferencing between in-house teams. It certainly is something neither service providers nor enterprises can ignore. For service providers it means yet another way to add revenues.

Retail and resellers

Business enterprises are switching over to VoIP. The retail end user too is discovering all the benefits of VoIP. However, their needs may be minor compared to enterprises. Still, there are millions of retail end users and the numbers add up. Service providers can reach out to such retail segment through the right class 5 softswitch, a white label solution and a reseller network. They can offer direct subscriptions, prepaid and postpaid facilities and PIN and PINless calling cards. Retail is another vast market that is coming alive and this is the right time to tap into it directly or through resellers. As in other areas the service provider can simply get a white label product and then market such services to a network of retailers not just in one country but across the world. The class 4 softswitch takes care of bulk and international traffic. In combination, class 4 & 5 softswitch provide an end to end infrastructure.

Tapping various business segments

While retail is in one direction and it is profitable too since service providers can charge a higher rate, the bulk revenue is in serving large enterprises and businesses in various segments with custom offering.

Manufacturing is one business segment that certainly saves tremendously on communication cost while enhancing flow of information through VoIP technologies. If a service provider can offer IP PBX or IVR or WebRTC on a subscription basis then it will be more than welcome.

Healthcare is another area that benefits tremendously with the switch to VoIP. WebRTC is just perfect for doctor-patient consultation and for doctors in different locations to share patient records in a secure way. This is just a couple of examples. VoIP based services can do much for hospitals and healthcare.

Startups are one of the most promising areas where hosted VoIP solutions fit in to perfection. Startups want enterprise grade communications but lack capital to invest in such infrastructure. Hosted services give them precisely the type of facilities they want and yet they do not invest a cent up front. They can scale up services and pay as they go. VoIP Services greatly add to their revenues and increase customers by offering communications as a service.

Travel is yet another area that hugely benefits by all the features that VoIP brings to the communication table. From small travel operators to airlines to hotel chains, everyone needs IP PBX, IVR, SMS broadcast and WebRTC. VoIP is just perfect since travel is a global operation and normal telephone communication can be grossly expensive and underwhelming in today’s needs where customers want instant contact through any channel.

There are still more possibilities

IoT as a Service

IoT is exploding. However, many businesses are still not ready to or capable of taking advantage of IoT due to technical and other reasons such as software cost. VoIP service providers can anticipate such rising demands and get an IoT solution they can offer as a service. This opens up yet another avenue for maximum returns on investments. Of course the service provider would need to have basic infrastructure by way of class 4 and class 5 softswitches in place.

Class 4 and class 5 softswitches

VoIP service providers can expand portfolio of products and customers provided they have a strong subsystem of Class 4 Softswitch and class 5 softswitch. Hardware based switches simply cannot cope with today’s needs and may be limited by cost of maintenance. Even softswitches have evolved considerably so a current model softswitch, in a manner of speaking, is what VoIP service providers must have in order to address expansion into all areas and tap more customers. The increase in variety of codecs in use is another reason to have a modern softswitch at the core of their operations. Today’s softswitches can handle more concurrent calls, assure better audio clarity, take care of security, allow a variety of media codecs and have some artificial intelligence woven in.


For service providers the sky is the limit. The market has not reached saturation point. Possibilities of adding more revenue exist provided they tie up with a suitable software vendor and offer a variety of services businesses need.


Author info

Akash Soni holds the position of Digital Marketing Executive at Ecosmob, a Customized VoIP and Web-IT Solution provider company. A writer at day and a reader at night, he is having keen digital marketing skills along with an experience in writing an SEO-friendly, creative & informative content for distinct industries.

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