Retail VoIP vs. Wholesale VoIP: Top 4 Helpful Comparisons

The global voice market is witnessing a surge in resellers, wholesalers, and service providers because of the tremendous opportunities the market has to offer. Consequently, industry players are establishing strategic partnerships to reinforce their market position in this competitive landscape. These partnerships promise significant benefits for businesses and individuals looking to leverage wholesale carrier services for their telecommunication needs through retail or wholesale voice packages.

The global wholesale voice market is projected to surpass $120 billion by 2032, growing at a massive CAGR of around 15% between 2023 and 2032. This growth will be aided by the rise in the trends of retail and wholesale VoIP termination services, smartphone proliferation, value-added services, and plummeting inter-carrier termination rates. However, with the voice market flooded with a wide range of competitive plans for individuals and businesses of all sizes, choosing between retail and wholesale VoIP termination providers becomes an uphill task.

Let’s understand the major differences between retail and wholesale VoIP to determine the best option for your communication needs.

4 Major Differences between Retail and Wholesale VoIP Termination Services

1.Set of End-users

Retail VoIP services serve the needs of individual customers and, sometimes, small to mid-sized businesses. However, retail VoIP is primarily used in home offices or residences by expats who want to stay connected with their family and friends abroad.

Wholesale VoIP termination services are intended for medium to large enterprises and service providers that consume hefty amounts of telephony services, either internally or as a provider. It also includes organizations that utilize a lot of international minutes and intend to resell into the retail VoIP sector. Unified communication platforms, value-added resellers, managed service providers, and cable providers who bundle up VoIP with other broadcast media are all consumers of wholesale VoIP services.

2.VoIP Call Termination Process

Although the termination procedure is the same for retail and wholesale VoIP calls, there is a difference in the number of intermediary carriers involved. In wholesale VoIP termination, when a person makes a call, the originator’s operator identifies the country prefix of the dialed number and chooses the cheapest route after comparing the price lists received from its partner carriers. Wholesale carrier services pass the call through multiple intermediary carriers before it reaches the destination to keep the price as low as possible.

Retail VoIP call termination providers may not necessarily compare the price lists from their partner carriers and may also choose to transport calls directly over their network. Thus, retail VoIP traffic reflects the total call volumes generated by end users, regardless of how their termination provider routes the call to its destination.

3.Type of Softswitch Used in the Network

A softswitch is software used in VoIP networks for managing routing strategies, protocol conversion, transcoding, and more. Retail VoIP termination providers use class 5 softswitches that operate on a small scale and handle calls between end users. It mainly routes calls within a limited geographical area. The number of calls that can be transferred via class 5 softswitch is also limited, i.e., a few hundred calls.

Wholesale VoIP termination providers utilize class 4 softswitch that operates on a larger scale that can handle massive traffic over a greater geographical area. Class 4 softswitch supports long-distance or international calls by distributing calls between carriers and IP networks using routing tables. It also takes routing requests from class 5 softswitches.

4.Type of Carriers Involved in Call Termination

Retail VoIP traffic mainly involves Tier 3 carriers as they primarily terminate calls to end customers. They focus on local businesses and specific market segment conditions. Their coverage is limited to specific areas, sub-regions, and metro cities. Tier 3 carriers use and pay higher-tier carriers to access their IP networks.
Wholesale VoIP termination providers own or use Tier 1 networks that support high traffic volumes and large customer bases through their peering relationships with other Tier 1 providers. They can deliver VoIP traffic to more than one continent. Wholesale VoIP traffic may also use Tier 2 carriers that combine paid transit via Tier 1 carriers and peering with Tier 2 carriers to terminate traffic to end users through Tier 3 carriers.

Retail VoIP vs Wholesale VoIP: Which one is Better?

Retail VoIP termination services have some features missing because of the limitations of class 5 softswitches. Since the software may not have an integrated telecom billing system, invoicing and billing become pretty slow, tedious, and complicated with retail VoIP termination. Retail networks often face disruptions in operations due to load-balancing issues related to their capability to handle large volumes of concurrent calls.

On the other hand, wholesale VoIP termination services offer a wide range of features and service level agreements. Wholesale carrier services make long-distance calls affordable and more accessible for SMEs. Software used in wholesale termination has an integrated billing system, a security mechanism, and an array of call-routing strategies. Wholesale VoIP’s benefits, like scalability, flexibility, speed, and capacity to deal with large call volumes, make it an ideal choice for businesses, resellers, and communication service providers.

Develop a Strong Business Communication Strategy with Wholesale VoIP

The inevitable rise in international e-commerce is an undeniable growth opportunity for businesses wanting to expand their reach to foreign markets. A strong business communication strategy is critical to scaling business operations, whether international or domestic. Wholesale VoIP termination services have everything a business needs to strengthen its communications, from capacity, cost-efficiency, and flexibility to global coverage.

Broadband Telecom ensures the highest quality of wholesale carrier services, using exclusive traffic arrangements and consistent traffic monitoring on the wholesale ring.