How to Start a Wholesale VoIP Business: Beginner’s Guide

5G adoption, increasing AI-first VoIP use cases, intelligent VoIP assistance, and the rise of unified mobile communications are some of the VoIP market trends these days. That is why it is unsurprising that the wholesale VoIP termination business is expected to witness exceptional growth over the next several years.

Since these modern technologies and business models bring many benefits with high returns on investment, VoIP termination providers will eventually incorporate them to launch more innovative and sophisticated VoIP services. According to a study, VoIP technology can help you save <90% on international calls, 40% on local calls, and 30% on teleconferencing.

Rising competition in the VoIP market, the cost-effectiveness of international wholesale termination, and the demand for intelligent omnichannel user experience provide entrepreneurs worldwide an entry into the VoIP business. Let’s understand the basics of setting up a successful wholesale VoIP business.

Wholesale VoIP Business Terminology

Here are some key terms frequently used in the wholesale VoIP termination business for various VoIP tools, features, services, infrastructure, and technologies:

Origination and Termination: VoIP is concerned with inbound phone numbers and the management of incoming calls. Similarly, termination refers to the delivery of outbound calls to the desired destination.

International A-Z: International A-Z VoIP termination providers often offer international calls to all available countries, from Afghanistan to Zimbabwe, at competitive rates.

Colocation: Colocation is a type of Infrastructure-as-a-Service offered by hosting companies. Your VoIP business gets full access to all VoIP services and capabilities, while the host company handles storage, servers, and other network devices.

PBX (Public Branch Exchange) Hosting: PBX hosting is an enterprise service offered by VoIP businesses. Companies use hosted PBX systems to route and manage VoIP traffic of incoming and outgoing calls within an office.

DID (Direct Inward Dialing) Number: DID number is a virtual telephone number assigned to a specific person’s phone within an organization. Callers can ring them directly instead of going to a queue, menu, or extension.

Codec: Codec (encoder-decoder) is a technology that converts your voice signals into a compressed digital form that can be transmitted over IP. Codecs vary by sound quality, bandwidth, and computational requirements.

SIP (Session Initiation Protocol): It is a communications protocol, a de facto standard for VoIP that allows the transfer of multimedia messages.

NOC (Network Operation Center): In telecommunication infrastructure, NOCs monitor and control network data flow, power failures, communication line alarms, and other issues that may affect the VoIP network.

Determining your VoIP Business Model and Market Niche

There are two options for starting a VoIP wholesale termination business: becoming a provider or a reseller. Providers must establish their secure servers, bandwidth, software, and hardware infrastructure to serve customers. They must also supervise all VoIP components daily to ensure the quality of service. Thus, providers must deal with the high risks of hefty capital investments and day-to-day management.

Resellers simply connect customers with existing VoIP services. They can get started without setting up VoIP infrastructure. Today, most companies leverage cloud, SaaS (Software-as-a-Service), and hosted models to save on maintenance and administration. It helps them cut capital expenditure as they don’t invest in expensive equipment.

In establishing a VoIP business, you must make tough choices regarding the market niche you will serve based on skill level, experience, finances, workforce, and partners. There are many wholesale VoIP business offerings that you should consider:

Setting up Infrastructure for Providing Wholesale VoIP Termination

Here is a brief tour guide to selecting the right equipment to set up the VoIP infrastructure:

Servers and Hosting

The type and quantity of on-premises servers depend on your traffic volume. If you are starting small, two servers are recommended to maintain better stability and have an option to grow. You can use one server for billing, invoicing, and financial data processing, while the other will be responsible for traffic streaming, centralized authentication, and client management.

You will require enterprise-level servers if you are dealing with high traffic volume for commercial clients. You can assign various functions to separate servers, e.g., a server for Remote Authentication Dial-In User Service (RADIUS), another for Real-time Transport Protocol (RTP), and so on.

Softswitch

A Softswitch is a central device in any VoIP network, so choosing a high-performance and stable solution is essential to meet all your VoIP traffic requirements. You must ensure that Softswitch is an all-in-one platform that has all required modules integrated, such as transcoding, billing, analytics, reporting tools, and routing mechanisms.

Again, Softswitches are categorized into different classes based on their application. Classes 1, 2, and 3 have large-sale applications, and classes 4 and 5 are used by corporations, telecom companies, and service providers to deliver VoIP traffic and services across networks. Class 1 soft switches are international gateways, while class 2 and 3 soft switches link cities and states.

Mobile Application

If you provide cloud-based VoIP solutions, you should consider creating a mobile application for clients. You can hire an in-house software developer team or outsource a customizable app from a software company. The app may include features like mobile dialers, payment and subscription options, SMS messaging, video conferencing, screen sharing, call forwarding, file sharing, etc.

Bandwidth Optimization

Different VoIP codecs and services demand different spectrums of bandwidths. For example, G.711 codec requires 64 kilobits per second with an additional overhead for safety, totaling 80-90 kbps of IP bandwidth.

Use a VoIP bandwidth optimizer because the last thing you want after establishing your VoIP business is customers complaining about interruptions, jitter, latency, and packet loss. Some solutions save up to 80% of the bandwidth by multiplexing the RTP payload and reducing the IP Header overhead.

Finding Suppliers and Clients

Finding the right supplier is crucial to running a successful VoIP business. Otherwise, you will probably encounter bad routes, 503 errors, dropped connections, and capacity issues. Today, every company seems to have a website and a social media account where you can find information to make informed decisions. Below is the list of things you should consider while finding suppliers:

Once you have found your suppliers, you can start providing your services to clients in your market niche that you can find through customer acquisition strategy and marketing. Rather than rushing into supplying too many clients too soon, understand your client’s needs, get feedback, and prepare a blueprint that exceeds client expectations. Then, you can test it on more clients to continue improving your services and satisfy a more extensive customer base.

Find Resources that Go a Long Way in Ensuring High ROI

VoIP technology is prospering because of its increasing demands, cost-effectiveness, and collaboration with AI and cloud computing. Establishing a VoIP business may seem complex, but once you get the gist, it’s easy to achieve desirable results. However, you must choose the right equipment and suppliers to ensure long-term profitability.

Broadband Telecom is a wholesale VoIP termination provider with exclusive traffic arrangements to help mobile operators, wholesale carriers, and OTTs provide global coverage to their customers.