CenturyLink (NYSE: CTL) is aware that Comcast Business, Charter and other cable operators are going to be a bigger threat in the SIP trunking segment of the business services market as more businesses ditch their TDM-based PRI lines and analog PBXs for IP-based hosted services.
The telco said that while it is seeing cable become a near-term competitor in the hosted PBX space, it has been a bit slower to come to market with a SIP trunking solution.
At this point, CenturyLink's main competition in the SIP trunking market is coming from the other two telcos -- AT&T (NYSE: T) and Verizon (NYSE: VZ) -- and a host of smaller CLECs like XO Communications.
"We've seen a ton of competition from the cable companies on the hosted PBX or hosted VoIP side of the house, but on SIP trunking they have been slow to come into the marketplace because their product offering isn't quite there yet," said Ted Fitzgerald, manager, strategic voice products for CenturyLink, in an interview with FierceTelecom. "I definitely anticipate they are going to be a big player soon, but right now it's definitely the big three -- us AT&T, and Verizon and some of the smaller CLECs are the big competitors when it comes to RFP responses."
That's not to say that cable operators aren't making an impact in the SIP trunking market.
Take Comcast Business (NASDAQ: CMCSA). Earlier this year, the cable MSO introduced a SIP trunking service across its entire service area, covering 39 states and 20 major U.S. markets, for example.
Having a SIP trunking business in hand will enable Comcast Business to better serve a diversity of customer segments that are looking for alternative sources for higher speed Ethernet and a partner to help them migrate off their legacy PBX platforms.
Despite the looming threat from cable, CenturyLink is well down the SIP trunking path, having developed IQ SIP Trunk product, one that's gaining momentum with a wide range of small to medium business (SMB) customers and large enterprises alike.
Based on BroadSoft's application-oriented SIP trunking platform, CenturyLink's IQ SIP Trunk service provides a host of features including unified communications, conferencing and contact center services are available, while SIP trunking is offered as part of several of CenturyLink's business bundles.
One of the unique elements of CenturyLink's approach to the VoIP services market is that it offers a custom portal that is used for its hosted VoIP managed office service and its SIP trunking service.
Fitzgerald said the company has focused on making the product interfaces simple for the customer to understand.
"We've made all of the complex Broadsoft features easier for the customers to manage and we have also streamlined all of the stuff we have to do internally in the backend to make things more efficient," Fitzgerald said.
By leveraging the Broadsoft platform, Fitzgerald said that it could simultaneously address smaller businesses with its Hosted VoIP product and SIP IQ products. Fitzgerald said that it could not address both of these elements with the Sonus platform it initially had been using.
"We wanted to build the hosted VoIP product because there was a big gap," Fitzgerald said. "We have been using Sonus SIP trunking for years and it has been crazy popular with millions of telephone numbers and close to a million sessions we have sold, but the problem is a lot of the customers down market wanted other features like call forwarding and fixed to mobile convergence and Sonus was not a good platform for that at the time."
Fitzgerald said that it is "not doing forced migrations off the Sonus platform and we are allowing new customers to go to Sonus because Sonus will always be part of our network."
The company is seeing a broad swath of customers, including everything from small businesses to large enterprises, taking the SIP trunking product.
"There are some customers that we just signed with that are over 100,000 sessions a month and there's other customers that are buying 10 sessions and that's all, so it is completely across the board, which is what we were hoping for when we designed the product," Fitzgerald said.
CenturyLink's presence in the SIP trunking market has gotten the attention of industry analysts like IHS, which ranked them second among the 10 SIP trunking providers that the research firm determined had the greatest installed base of lines/trunks for IP connectivity.
All of the providers were evaluated based on four criteria: financial stability, market strategy, service capabilities and support options. IHS said in its scorecard that CenturyLink scored highly due to their significant investment in "resources into its overall business VoIP services portfolio over the past year" as well as the strong growth of its installed base.
Overall SIP trunking is gaining momentum in the business services space. According to a OneVoice study, 65 percent of businesses are currently using SIP, and the number of SIP trunking users is expected to grow more than five times by 2017.
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