Value Proposition

Sacramento starts VoIP tax

Pete Wylie — Fri, 12 Dec 2008 12:17:18 -0500

Sacramento, Calif., initiated a tax on VoIP communications today, as "Measure O," the "Utitlity User Tax Reduction and Fariness Measure" takes effect. The measure drops the overall tax rate on communication services from 7.5 to 7 percent, but the tax now includes VoIP calls, text messages and voice features like call waiting and caller ID as taxable items.

Internet access won't be taxed, but mobile data plans will. Telecommunications companies have until March 1 to begin assessing the taxes on customers' bills.

Measure O passed on November 4, with the stated aim of "ensuring that communications users are treated uniformly without regard to the technology used." Sacramento will receive an estimated $12 million annually from the increased tax revenue.

A VoIP customer in Sacramento averaging $20 per month in charges will spend an additional $16 per year for phone service, which isn't a tremendous increase. But with economic times tight, regulations like Measure O eat away at vanilla VoIP's value proposition. If similar measures pass in other cities, VoIP providers wouldn't lose any direct revenue since the actual service price stays constant. But VoIP taxes might slow adoption and the is always the annoying accounting overhead when different cities set different rates and demanded compliance.

For more:
- the Sacramento Bee has a preview article and an article on the start of the tax

Related articles
Los Angeles imposed a similar tax earlier this year
Texas Think Tank Fights Missouri VoIP Taxes

Verizon Business exports key VoIP services around the globe

Pete Wylie — Wed, 03 Dec 2008 13:27:40 -0500

Verizon Business announced today the international availability of its VoIP Interoperability Lab and its automatic call rerouting for VoIP customers. Previously, the Interoperability Lab was only available in Europe and the automatic call rerouting feature was only available in the U.S.

Karen Gergelyi, Verizon Business global VoIP trunking services product manager, said the increased availability of the features was part of a push to refine its value proposition for VoIP trunking.

"The interoperability functions give a huge amount of flexibility, because we can sell to any customer because of the ability for them to self-test their existing systems," Gergelyi said. "And the inbound failover feature now available in Europe is a critical capability for the package to have."

Gergelyi said she had seen particularly strong demand and positive feedback about inbound failover from retail, financial and insurance companies, or any business with many distributed locations. She also noted that the interoperability lab would be an added feature for customers to test their existing systems with Verizon's solution. As part of the announcement, Verizon Business also certified an additional Nortel IP PBX for its IP Trunking offering.

For more:
- see the Verizon Business release here

Budgets drive N. American SMEs to hosted IP telephony

Thu, 24 Apr 2008 06:59:54 -0400

Research and Markets "North American Hosted IP Telephony and VoIP Access Service Markets 2008" (written by Frost & Sullivan) finds that North American IP and VoIP access service markets are expected to continue grow over the next several years. The biggest growth has been in hosted IP PBX services with the key value proposition (as you'd expect) in the ability to offer a fully outsource solution to small and medium enterprises (SMEs) that lack the money to implement and manage telephony in house. There is also bonus credit given for greater scalability and business continuity associated with hosted solutions.

Despite the improvements in IP telephony, businesses remain skeptical of the technology's ability to match the level of reliability in the PSTN. Another downside listed is E911 compliance issues.

Still, the report sees more hosted IP telephony services moving beyond SMEs into large (over 500 employees) businesses, especially those with remote offices and telecommuting workforces. Incentives include cost savings and the ability to migrate sites on an individual basis through hosted, rather than to upgrade voice infrastructure (and all those capital costs) all at once.

For more:
- Research and Markets North American Hosted IP and VoIP access report brief.

Related articles:
Hosted VoIP one click away
Enterprise VoIP in 2008 an uphill battle
XO Hosting Mobile UC

Limited Budgets Drive North American SMEs to Hosted IP Telephony

Doug Mohney — Mon, 21 Apr 2008 22:50:09 -0400

Research and Markets “North American Hosted IP Telephony and VoIP Access Service Markets 2008" (written by Frost & Sullivan) finds that North American IP and VoIP access service markets are expected to continue grow over the next several years. The biggest growth has been in hosted IP PBX services with the key value proposition (as you’d expect) in the ability to offer a fully outsource solution to small and medium enterprises (SMEs) that lack the money to implement and manage telephony in house. There is also bonus credit given for greater scalability and business continuity associated with hosted solutions.

Despite the improvements in IP telephony, businesses remain skeptical of the technology’s ability to match the level of reliability in the PSTN. Another downside listed is E911 compliance issues.

For more:
- Research and Markets North American Hosted IP and VoIP access report brief.

Related articles:
Hosted VoIP one click away
Enterprise VoIP in 2008 an uphill battle
XO Hosting Mobile UC