Of Mergers and Mayhem

Posted by Gary Wilson, Product Manager

April 28, 2014; 12:59 PM

Changes_in_TelecomThe state of change that is telecom continues unabated. With the announced acquisition of Cbeyond by Birch Communications, the Tier 2 carrier market keeps on shrinking. Such is the life of these facilities-based carriers. When you think about it, this has to happen.

Many of these carriers have either invested or acquired a lot of copper lines, delivering both analog and T1/PRI services to residential and business customers. The problem is these lines must be run back to a CO switch somewhere locally. This tends to keep these carriers focused at specific local markets, limiting their growth potential. As their customers shift to wireless and other services, their customer base only continues to shrink. Combining forces is the only way to prevent this customer base from shrinking further.

AT&T and Verizon have already realized these smaller markets are not where they want to be and have been actively selling off many of their telecom networks in Tier 2 and 3 markets. Frontier winds up being a big buyer as they continue to expand.

But what happens if you only offer SIP Trunks? Suddenly, the whole locality aspect becomes a non-issue. SIP Trunks can be provided anywhere there is bandwidth. This is one reason why the market for SIP Trunks grew 50% last year, according to the 2014 VoIP and UC Services and Subscribers report from Infonetics. SIP Trunk providers can provide service nationwide - or even globally depending on the state of the telecom markets in various countries. Because ESI's reseller base is nationwide (and even in Canada), we can offer SIP Trunks anywhere you do business, even to some international destinations.

Expect to see the mergers and acquisitions continue as the carriers that don't want to fade away look for some way to hang on just a bit longer.

Topics: telephony