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Bandwidth Bringing Profits Back to Voice

Carol Wilson
11/8/2013

A company generically named Bandwidth conjures up images of big fat data pipes, but in reality the company called Bandwidth is more focused on selling an array of services built around voice than a lot of data bits.

As a wholesale voice services provider and national CLEC, Bandwidth.com fuels over-the-top providers and VoIP services with voice networking, an E911 network, telephone numbers, and SMS capabilities. It runs a pure VoIP network -- no TDM gateways here, folks -- and counts Google (Nasdaq: GOOG) Voice as a major customer, along with RingCentral Inc. and Pinger Inc. , and such VoIP stalwarts as Vonage Holdings Corp. (NYSE: VG).

Founded in 1999 by David Morken, Bandwidth is hardly a newcomer to the market, but it has retained its upstart feel, as witnessed by the company's "Spirit Week," capped off by an executive dance-off, won by Morken.

Bandwidth boogie: 'Are you sure this'll help boss?'
Bandwidth boogie: "Are you sure this'll help boss?"

Bandwidth is also parent company to Republic Wireless , an MVNO that uses WiFi as the primary means for delivering both voice and data services over its own Moto X handsets for as little as $25 a month.

The privately held company is one of a group of US CLECs that is not only not abandoning voice, but is capitalizing on what voice can be in the IP world. And, according to its leaders, Bandwidth is both profitable and debt-free.

This week, Bandwidth announced Ad Hoc Labs is now running its Burner app over the Bandwidth voice and messaging network. Burner lets mobile phone users instantly activate a private phone number on either an iOS or Android device, for use in social media postings, online want ads, data services, and more. Among other things, Bandwidth provides those phone numbers through an API to its Application Platform that allows Ad Hoc Labs to integrate directly into the nationwide voice and SMS network.

That translates into instant scalability and reach, says Jason Sommerset, director of product development for Bandwidth. "They can leverage the infrastructure we have and focus on their software, customer service and their customer acquisition model."

Courting the OTT crowd
Ad Hoc Labs is one of the OTT players with whom Bandwidth works, but the company also supports MVNOs and more traditional telecom players such as Phone.com, which sells hosted services to small businesses and has set up a portal that integrates its back office into the Bandwidth back office. "They have access to our numbering pool and they can provision from their system into ours so they can have a VoIP phone up and running in minutes," says Ken Grelck, SVP of Sales for Bandwidth.

Bandwidth offers back-office integration in three flavors -- the carrier can do it all for its wholesale customers and connect via APIs; it can automate the provisioning process so the customer's system is connected to Bandwidth's back office; or it can allow the customer's back office staff to handle provisioning. Increasingly, newer, more nimble players are more interested in handling less of the process, Grelck says.

Bandwidth's mantra is to be disruptive of existing markets. That is most apparent with its Republic Wireless unit. Working off patented handoff technology between cellular and WiFi networks that prevents calls from dropping, Republic offers all-IP based voice and data over the Moto X phones. Because its WiFi offload supports both voice and data calls, only about 30 percent of the MVNO's traffic is carried via cellular service, with the rest riding on WiFi, Grelck says. Even on the cellular network, Republic's voice service is carried as VoIP on a data channel

The Raleigh, N.C.-based firm also is growing its wholesale business by 20 percent a year despite the overall decline in voice revenues, because of its focus on how to use voice and related assets to innovate, as Ad Hoc Networks is doing. The key, says Grelck, is being able to move quickly because apps providers and other innovators who want to integrate voice like the notion of APIs and automation, not long integration processes.

Last but not least, Bandwidth is also seeing growth in Unified Communications sales to enterprises, something it sells on a per-seat, per-user basis through channel partners, as an extension of its SIP trunking business.

As UC gets actual traction, Grelck expects this part of the business will also grow as more innovative players emerge and look for national network partners to let them go to market quickly.

— Carol Wilson, Editor-at-Large, Light Reading

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