Making money in today’s voice environment

In the past several years, the international voice industry has shifted from slow growth to maturity. Volume increases have largely been offset by price declines, creating intense competition for existing revenue. But at the same time, we’re seeing exciting innovation in voice, especially with adoption of HD Voice starting to spread across the industry.

But to keep funding these innovations, the industry has to make a switch that can seem foreign in the telecom sector: from managing for growth to managing for profitability.

Traditionally in telecom, bigger has been seen as better, and many providers have focused primarily on growing their top line by growing their total traffic. However, in a mature market like voice, the real focus is and should be on the bottom line to ensure the overall health of our business. At Tata Communications, every single, incremental, minute we carry is profitable, and makes sense to us from a business perspective.

There are 3 key imperatives we’ve identified to successfully manage for profitability.

Improve business visibility
Successfully managing for profitability requires near real-time visibility on traffic volumes and margins, along with credit risks, currency fluctuations, and potential instances of fraud. Without the ability to pinpoint this information per destination in real time, providers will be unable to distinguish profitable traffic from unprofitable, and will be vulnerable to rate errors and arbitrage.

Increase efficiency
Inefficient and manual processes increase the resources needed to manage an international voice business, as well as introducing opportunities for errors and delays. Integrating back-office tools with routing, reporting and analytics systems leads to better results, and lower overhead.

Invest for the future
More traffic than ever is shifting to IP-enabled endpoints, especially on mobile network, and we’re starting to see the commercialisation of some of the innovations convergence enables, starting with HD Voice. To continue making money, we need to be ready to deliver these services over next-generation networks, and with future-ready routing tools.

Tools to manage the transition
Working closely with our partners over the past few years has shown us that shifting focus to the bottom line is not easy. So we developed a suite of hosted tools and managed services to simplify the path to a more efficient and future-proof voice business. We’re proud to be launching the results of these efforts today at ITW2013: Voice Business Apps.

Together, our apps offer all of the functionality international voice providers require, from network to routing, to back-office tools and granular reporting systems. Many of these apps are built on the same capabilities we use to terminate over a billion minutes of traffic a week. Our apps model also includes help with deployment and operational challenges from our team of over 600 voice experts.

Voice may be the elder statesman of the telecom industry, but that doesn’t mean we’ve stopped innovating. I’m excited to share a look forward to the future with you as my guest-blogging stint continues.

Michel can be reached at michel.guyot@tatacommunications.com