Cable Operators Roll Out Managed Voice Services for Businesses
As part of their new efforts to sign up mid-sized and larger companies as business customers, major North American cable operators are increasingly rolling out more advanced hosted and managed voice services. They include Session Initiation Protocol (SIP) trunking and hosted IP-PBX offerings.
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Charter Communications became the latest large cable provider to move toward managed VoIP services for the commercial sector with the launch of SIP trunking services. In early December, Charter rolled out SIP trunking for companies with more than 20 employees in Wisconsin and Missouri, where it competes with such incumbent telcos as AT&T and Verizon as well as with various CLECs and such over-the-top (OTT) providers as Bandwidth.com. Charter expects to extend its new hosted voice services to all of its cable markets by early 2012.
Charter’s SIP trunking initiative complements a Primary Rate Interface (PRI)-based service that it launched about two years ago. The new service should give Charter more flexibility. While PRI requires business customers to buy voice packages in increments of about 20 channels, SIP trunking allows customers to buy services in call-path increments of just four channels, said Jim Bagnato, senior product manager for Charter Business. With the addition of SIP trunking, Charter is also aiming to become technology-neutral at the customer premises level. Previously, Bagnato acknowledged, Charter had to turn away some sales opportunities because of technical restrictions. The introduction of SIP trunking also will enable Charter to interoperate with IP-PBX systems, allowing it to pursue larger business prospects more aggressively.
Charter generated $148 million in Q3 commercial revenue, up 19 percent from the same period a year earlier. For the first nine months of 2011, the cable operator chalked up $426 million in commercial revenue, up almost 17 percent from the year-earlier period. That puts it on track to have hit $570 million for all of 2011. Voice services account for a good chunk of that.
Charter’s approach is reflective of a new, growing service category for the cable industry. Cablevision, Cox Communications, Comcast, Rogers Communications and Time Warner Cable are among the major cable providers that have launched SIP trunking in the past couple of years or have field tests and pilot deployments underway.
Earlier last fall, Cablevision’s Optimum Lightpath unit, which focuses on mid-market and larger firms, introduced its next-generation Optimum Lightpath Hosted Voice service in the New York metropolitan area. Designed specifically for mid-market and large businesses, the cloud-based phone service offers an array of new features, including capabilities to keep mobile workers seamlessly connected on the road. Cablevision said the new product also offers flat-rate pricing, requires little or no upfront cost and runs over Optimum Lightpath’s all-fiber network.
"The technology is ready for prime time,” said Ernie Hoffmann, vice president of product management for Optimum Lightpath. He said Cablevision’s business unit is targeting mid-market firms with “50 to 100 seats,” or phones, in its hometown market. Although Cablevision competes fiercely against Verizon, AT&T and niche CLECs in the New York market, Hoffmann said the company’s biggest competition is a high degree of customer “inertia,” not its telco rivals. “Their phone systems work now,” he noted. “So companies are afraid to make a change.”
Cablevision’s new hosted voice offering builds on Optimum Lightpath’s earlier hosted voice product, which was introduced three years ago. That service, sold as an add-on to Optimum Lightpath’s Internet Voice Bundle, offers additional Internet bandwidth to support phone calls and a range of voice-use packages. The service also offers free calling to other Optimum Lightpath Hosted Voice customers and HD Voice.
Comcast, which has lagged behind some of its cable brethren on the business phone front, is looking to step up the managed voice pace as well. Speaking at a Light Reading conference on cable business services in New York last month, Kevin O'Toole, senior vice president of product management and strategy for Comcast Business Services, said Comcast has introduced hosted PBX services in a couple of regions but has “not put its full weight behind it yet.” Now that Comcast has rolled PRI service throughout the nation, he said, managed voice services will come next. The new year, he said, will be one of “execute, execute, execute."