Level 3 Takes Wholesale VoIP to the Cloud

May 13th, 2013 by · 6 Comments

With its enterprise business carrying the growth mantle of late, Level 3 Communications (NYSE:LVLT, news, filings) switched things up and today unveiled a new initiative aimed at selling cloud-based carrier VoIP to other service providers. Teaming with the cloud voice provider Alianza for a carrier cloud voice solution, they are targeting service providers of all types who need to focus on other things to find growth.

Level 3’s Enhanced Local Services have long been positioned as a VoIP toolbox, from which service providers could select what they needed a la carte. The joint solution takes that toolbox and melds it with Alianza’s cloud-based voice SaaS platform, glued together with APIs for back-office integration, billing, and service management. The end result is intended to be a complete carrier-grade voice black box with an economic advantage.

The voice business has been evolving, and while many think of VoIP as trending towards ‘free’ it still costs money for service providers to operate. As voice as a whole becomes more commoditized relative to data, Level 3 is clearly looking for a wave of outsourcings to help give its wholesale business new legs.

That’s the theory, anyway. Just which segment of the market is most likely to take advantage of this will take some time to become clear – though I think the larger providers are always less likely to outsource. After all, Time Warner Cable has just been finishing up the migration of its VoIP in-house from Sprint – is it time to go back the other way already?

Perhaps more likely this will be attractive to smaller MSOs and to CLECs in the midst of a transformation to the managed service and IT world. They have plenty of legacy voice revenues to manage, but they’d rather be spending resources on their cloud-based IT services.

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