Profile – VoIP Innovations

Fresh changes in the IP voice industry guide growth

By Tara Seals

Wholesale VoIP services provider VoIP Innovations is eyeing new growth in the IP voice industry and is gearing up to make the most of the opportunities in a segment that is forecast to grow consistently for the next five years.

Pittsburgh-based VoIP Innovations offers origination and termination with a slew of calling features, E911 and a hosted billing and back office platform. It handles about 300 million calls per month and maintains a dedicated crew of 55 employees. President Jason Tapolci said that several trends are at work that are guiding fresh expansion for the company in 2015.

To start with, the company’s initiatives for the new year include adding SMS functionality, as well as implementing a bring-your-own-carrier option, so that customers can keep their existing carrier contracts but still use the VoIP Innovations back office.

Enabling the SMS functionality goes toward the concept that end users can buy one number that acts as a central, universal ID – one number that can receive calls, faxes, texts, perhaps unified communications functions such as e-mail and video chat functionality and so on, along with classic landline features such as 911 and caller ID.

“We most certainly see VoIP merging with other communications methods,” Tapolci said, adding that the Web 2.0 concept of rich, multimedia communications experiences is finally becoming reality. “In the age of the cloud, and everyone having a device that connects to that, be it with a smartphone or what have you, traditional telephony functions like voice are blending with advanced data, mobile and online applications.”

He added, “The IP landscape is changing so fast that it’s almost scary, and companies in this business have to adapt. If you don’t, the pace of change will gobble you up.”

The bring-your-own-carrier option, meanwhile, is aimed at widening its customer base. “We have a really impressive back office,” Tapolci said. “Why not allow wholesale customers to make use of that? We would love to eventually transition them to our own termination and origination services, but we see a value in having a standalone back office option.”

Tapolci said that the company is expecting a few industry-wide VoIP trends to impact its business going forward as well. In particular, he sees a bigger movement to embrace number peering, so that VoIP calls can be exchanged directly without involving upstream incumbent carriers. This will be helped along by FCC reform of the intercarrier compensation system that defines how, and how much, telecom carriers pay for the use of each other’s networks. The system will be phased out in 2017, paving the way for more direct interconnections.

He also expects there to be some shaking out on the competitive front.

“This industry has been like a balloon – with so much uptake for VoIP, everyone seemed to have jumped into it, especially on the wholesale front,” he explained. “But now what’s happened is that the balloon has contracted a bit. In the last 18 months, I’ve seen a lot of consolidation and companies going out of business, despite the industry growth. It’s simply too difficult for most newcomers to gain the expertise and the scale to survive in the wholesale market at this stage. The industry is too mature.”

At the same time, there has been a rise of single-purpose mini-markets on the enablement front, such as those for fraud monitoring and prevention, 911, taxation, least cost routing and so on. This trend will continue to define the industry, he predicts.

“It seems like people are getting more specific in their offerings for service providers,” Tapolci said. “As the industry grows we can sustain little mini-industries like this. There’s opportunity in addressing the pain points – that’s one of the biggest trends that I see going forward. Companies can’t be everything to everyone anymore, so they will need to pick what they do best and own that market. And there’s room to do that.”

The company is also gearing up to officially launch the Tapolci Foundation, which is a charitable organization that Tapolci created with his brother. It will have a Web site to take donations for VoIP Innovations’ own charity efforts – company employees volunteer at the local food bank, annually clean 5,000 veteran graves at the Allegheny Cemetery, and last year sponsored four Make a Wish kids – but will also act as a Kickstarter-like destination for others’ donation efforts. The Foundation will vet those with charitable causes (everything from helping local families and individuals in need, to bigger drives for national charities), and allow them to set up their own donation portals.

“I could not be more excited to watch 2015 unfold,” Tapolci said. “We are prepared and ready to continue to innovate and support growth in this business.”

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