Business IP Trunking has been one of the fastest selling products of those service providers that have been selling VoIP access to enterprises. Business IP trunking is a low risk proposition for both service providers as well as customers. Throwing a broadband access pipe and not having to change operations inside a customer premises is a much easier and a quicker sale for a service provider.
On the equipment side there are two types of vendors who could potentially compete with each other in this area. Type A would be Class 4 softswitch vendors like Sonus and Veraz (apart from legacy Class 4 softswitch vendors). Type B would be vendors like Broadsoft and Sylantro. Type A typically bundle their media gateways with the Class 4 softswitch product. Type B, Broadsoft and Sylantro, on the other hand bring in a disaggregated application server for the purpose.
Type B have certain fundamental advantages over Type A in business IP trunking market. If you have Class 4 softswitch infrastructure you can sell IP trunking to business customers. But the upsell opportunity is minimized. With Class 4 softswitch you can get basic IP trunking. You can do basic digit translation and route traffic between PBXs. But the opportunity for carrier to bring other value added access services to those PBX users is very limited. With Sylantro and Broadsoft type of products you can not only do IP trunking, you can bring phones that use hosted services and enable them with other value added services. Now the carrier can add value as well as revenue and can position itself as PBX service provider.
Class 4 softswitch vendors have their on own territory. These vendors have found success in the core of the service provider’s traditional long distance network. This is an area that Sylantro and Broadsoft will not be able to compete in. Simply because Sylantro/Broadsoft type solution does not do the traditional Class 4 softswitch function: IP-to-PSTN call flow and vice versa. Their solution is optimized for features and at the most routing traffic between PBXs, but not PBX to PSTN.
In terms of prospects of business IP trunking, North America is definitely the leader. The reason for that is simple. If you look back 10 to 15 years, a lot of CLECs were successful in selling integrated access services for TDM in the US. IP business trunking is really an extension of that. In Europe they do not have the legacy of selling integrated access services. The market dynamics do not encourage you to wholesale provision E1s.