John Malone
John Malone is the president of The Eastern Management Group, a communications industry market research company. The firm supports more...
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John Malone | June 26, 2017 |


SIP Trunking Value: Customers Rate Flowroute, TPx, MegaPath Among Leaders

SIP Trunking Value: Customers Rate Flowroute, TPx, MegaPath Among Leaders Falling prices don't tell the whole story, says Eastern Management Group.

Falling prices don't tell the whole story, says Eastern Management Group.

SIP prices drop every year. This year the dip is about five percent. So does that translate to value? And are the vendors with the cheapest prices creating the most customer value? Our global report, "2017 SIP Trunking Customer Satisfaction," suggests the answer may be no.

Flowroute, TPx, and MegaPath are three of the 10 leaders in value. They share honors with Inteliquent, 8x8, BroadSoft, and four other SIP trunk providers based on the Eastern Management Group's research study.

Source: "2017 SIP Trunking Customer Satisfaction Study," Eastern Management Group Research

In our customer satisfaction research, we asked 2,000 customers to rate their SIP trunk providers on several measures, including value. Ten vendors scored high in value. Granted, some of these vendors charge so little for SIP trunking one might question whether trunking overall is profitable. But our research suggests price is only one of several variables affecting what constitutes customer value. Let's have a look.

We examined the SIP trunk prices of numerous providers -- value leaders and others. The leaders charge as little as $0.007 per minute for outbound metered calls. Channelized SIP trunk call plans run about $24.99 per month. True, every vendor prices differently, but these prices are a gauge for what we found in our broader research for the "SIP Global Market Analysis and Forecast 2016-2020" report. In our opinion, the value leaders price their SIP trunks quite reasonably and competitively.

But the research shows more than cheap equals value. We conducted our customer satisfaction study on 31 SIP trunk providers by surveying 2,000 of their customers. And while SIP trunks from the value leaders are often reasonably priced, they tended to perform well in customer satisfaction measurements such as technology and product, support, or management tools, as well (read related No Jitter post for all 10 measurements). And so we interpret the value as the sum product of a solution. Value tells us how much bang for the buck the customer is receiving, not just the price.

As a litmus test, we examined SIP trunking providers with lower value scores. Among these companies, we observed that cheap prices have little impact on value. Vendors with low value scores frequently often had weak scores in satisfaction measurements such as installation or support.

But all this may be ignoring a larger business issue.

The SIP trunking value leaders represent different business models. Flowroute, for example, provides carrier-grade networks for cloud-based telecommunications companies to build and deploy complex systems. TPx is a managed services carrier. Twilio is a cloud communications platform company. MegaPath is a business communications and network provider. In each case, SIP trunks are key to the portfolio, but they are not the portfolio. Vonage's business is cloud-based unified communications across all platforms. It has SIP trunks in the company product portfolio, but Vonage gets them from BroadSoft, a value leader... which is to say value leaders have an expansive view of their business models.

So just how much should you care that SIP prices are dropping five percent? If SIP trunking were an oligopoly you might care a lot. But with 31 major SIP providers in the portfolio we track, prices are always going to be competitive and low. And they will continue to fall, which is the nature of technology and competition.

For questions about our customer satisfaction study and report please ask our researchers at the Eastern Management Group.


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