North America Business VoIP Service Scorecard

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1 North America Business VoIP Service Scorecard Excerpts This is an excerpt of the report provided at no charge that provides detailed information on IntelePeer, key summary information, detailed information on IntelePeer s assessment, and the methodology behind the report. The full report can be purchased from Infonetics at Campbell Technology Parkway Suite 200 Campbell California t f Silicon Valley, CA Boston, MA London, UK

2 TABLE OF CONTENTS TOP TAKEAWAYS... 1 BACKGROUND... 1 IP CONNECTIVITY LEADERSHIP SCORECARD... 3 IP Connectivity Provider Summary...4 METHODOLOGY... 5 Service Definitions...6 LIST OF EXHIBITS EXHIBIT NORTH AMERICA IP CONNECTIVITY LEADERS... 3 EXHIBIT NORTH AMERICA IP CONNECTIVITY LEADERSHIP SCORECARD... 4 EXHIBIT 3 INTELEPEER S SCORES VS. AVERAGE SCORES OF ALL 10 IP CONNECTIVITY PROVIDERS... 5 i

3 TOP TAKEAWAYS Over the past 4 years there has been slow and steady consolidation of business VoIP providers in North America. However, the mergers and acquisitions have not significantly lowered the number of VoIP service providers in the region. The market cannot sustain the large number of providers long term, so we will see further consolidation or providers closing down. On the IP connectivity front, the bulk of the installed base has become concentrated with the large operators. In a service market based on lower-cost, scale is necessary for a successful business. The IP connectivity market has become dominated by the likes of Verizon, XO, AT&T, Windstream, Level 3, and Sprint. Among all these VoIP business providers, a few stand out: For the 6th year in a row, Verizon is the market leader for IP connectivity, followed closely by XO. These providers have been consistent mainstays in this market and have led service development and customer adoption. Although XO continues to have the largest installed base of IP connectivity trunks, Verizon leads due to its financial stability. Though the installed base of IP lines is important to IP connectivity leadership, financial stability and market strategy continue to have a measurable impact on the overall standings. This is indicative of the health of a number of service providers that, as competitive carriers, have had a history of financial struggles. BACKGROUND This 6th annual North America Business VoIP Service Leadership Scorecard complements Infonetics Research s VoIP and UC Services and Subscribers worldwide and regional market share, size, and forecast report. The purpose of the leadership scorecard is to determine which service providers currently lead the market and are best positioned to succeed in the long term based on a set of criteria. We include market leadership for IP connectivity providers. First, we determined the top service providers in terms of the number of lines/trunks for IP connectivity. We then evaluated them based on the following four criteria: Financial stability Market strategy Service capabilities Support options Please see Methodology for definitions and weighting for each criterion, and a full description of how we evaluated each provider. 1

4 We rated each service provider in each of the four areas on a 5-point scale and then apply a weight; see Methodology for the specific rating definitions for each metric and the weights we assign; the following are general definitions: 5 = leading the market 4= advancing 3 = moderately positioned 2 = limited position 1 = market laggard 0 = no activity/not applicable The combined score for each provider was then tallied to provide their leadership score. 2

5 IP CONNECTIVITY LEADERSHIP SCORECARD The next chart shows that leadership in the IP connectivity market in North America has strong players at the top and then evens out and becomes very tight. Verizon has consistently been in a leadership position over the past 6 years and continues excel through a growing installed base and strong financial stability. The top 4 are rounded out by XO, AT&T, and Windstream. XO has consistently had the largest installed base, but its financial picture has created more downs than ups. IntelePeer and CenturyLink are new additions to the scorecard this year, and the BroadVox business changed hands and is now Fusion. This is a highly competitive market, and the top providers' overall scores are close, but the financial stability of Verizon, AT&T, and Windstream make those providers stand out. Exhibit North America IP Connectivity Leaders ` Verizon XO AT&T Windstream Level 3 IntelePeer Sprint Fusion Bandwidth CenturyLink Lines installed base Financial stability Market strategy Service development Support options 3

6 Exhibit North America IP Connectivity Leadership Scorecard Service Provider Installed Base Financial Stability Market Strategy Service Capabilities Support Options TOTAL Verizon XO AT&T Windstream Level IntelePeer Sprint Fusion Bandwidth CenturyLink IP Connectivity Provider Summary IntelePeer is a new addition to our IP connectivity scorecard this year. Founded in 2003, the company is privately backed by a handful of venture capitalists, with total funding of over $50M. In 2013, IntelePeer s revenue was 44% higher than in The provider sells direct to large enterprises and contact centers and uses channel partners down market. Though IntelePeer is smaller than incumbent providers such as Verizon, AT&T, and Windstream, it is working to develop a portfolio of business VoIP services and is proving nimble and willing to try new things. IntelePeer s CoreCloud SIP trunking service connects a variety of UC and PBX solutions from vendors including Asterisk, Avaya, Cisco, Microsoft, and ShoreTel and offers interoperability with Interactive Intelligence contact center solutions. CoreCloud SIP Trunking is available as an OTT option with direct connections to SIP-ready PBXs or over dedicated IP network connectivity. The company continues to enhance its SIP trunking service, in the last year adding FCC E-Rate support, TLS/SRTP encryption, and failover/ redundancy options for high availability scenarios. IntelePeer s SIP trunking service has been a launch pad to additional enhanced services such as cloud UC. 4

7 Exhibit 3 IntelePeer s Scores vs. Average Scores of All 10 IP Connectivity Providers Lines installed base Financial stability Market strategy Service development Support options IntelePeer 2013 average score METHODOLOGY The VoIP services market leadership was based on the following steps: 1. Identified the top service providers by the installed base of business lines/trunks, based on actuals provided by operators and Infonetics estimates 2. Calculated each of the service providers' share based on total lines/trunks, which was then converted to points (e.g., 50% = 5 points) 3. Determined four metrics (in addition to installed base) important to leadership and longterm success: financial stability, market strategy, service capabilities, and support options (see the next section for definitions) 5

8 4. Rated each provider on a 1 5 scale for the 4 categories, based on Infonetics Research's opinion. See the next section for the specific rating definitions for each metric; the following are general definitions: 5 =leading the market 4= advancing 3 = moderately positioned 2 = limited position 1 = market laggard 0 = no activity/not applicable 5. Weighted each metric (based on relative importance in determining market leadership): installed base of lines/trunks or seats (5), financial stability (2), market strategy (1), service capabilities (1), and support options (1) 6. Calculated results Service Definitions Business IP connectivity: IP connectivity to the PSTN from a single business location and PBX to PBX; includes basic access and integrated access to PBXs and key systems. VoIP VPN/IP access: provides IP-based PBX-to-PBX and PBX-to-PSTN interconnection over a broadband data network; PBXs can be TDM or IP based. SIP trunking: provides IP PBX with SIP interface direct PSTN connectivity. No IAD or router is required on premises but may connect through an enterprise SBC. Based on SIP protocol. IP integrated access: a fully integrated voice and data service delivered over a single physical connection; typically a T1/E1 or in some cases a DSL line. Analyst Contact Diane Myers Principal Analyst, VoIP, UC, and IMS

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