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Russian Dotcom Success Story, The Crisis That Stimulated Demand for SIP Trunking Services


TMCnews Featured Article

November 20, 2008

Russian Dotcom Success Story, The Crisis That Stimulated Demand for SIP Trunking Services

By TMCnet Special Guest
Dmitry Vlasyuk, NXvoice Networks

In 1958, American Express (News - Alert) opened its representative office in Moscow. Thirty-three years later - in 1991 - the first Internet-enabled terminal was installed in Russia, powered by a dialup link to Helsinki, Finland, to put them online. Post-1998 saw tremendous growth in broadband access: from 64 kbit ADSL with metered bandwidth in 2000, to 25 Mbit symmetrical FTTH services in 2008.

Once the infrastructure and cheap consumer broadband were there, the stage was set for explosive growth of VoIP services. Initially limited to long distance toll bypass, the market has grown to rich multimedia applications that support voice and video, with sophisticated hosted softswitch and callcenter features. Despite the huge popularity of Skype (News - Alert), many Russian consumers eventually turned to SIP-based services. Over 50 percent of ISPs in Russia offer a bundled SIP ATA solution for customers who have broadband at home.
Once the consumer SIP+ATA solution gained popularity, business started looking into using DIDs as means of cutting costs and achieving greater flexibility. Like all over the world, the DID feature revolutionized the way mobile professionals do business in Russia and abroad.
NXvoice Networks LLC, a Moscow-based ISTP, was one of the first companies in Russia to introduce the SIP DID functionality. The company offered specialized origination services (DID numbers)  in Moscow and St. Petersburg areas where NXvoice established interconnection to the PSTN CLECs. However, NXvoice was soon facing a real growth problem - there was a huge number of requests, but 99 percent of the customers had absolutely no idea how to use an ATA, configure a SIP trunk in their IP PBX (News - Alert), or have even heard of such terms before. As it is always the case in the consumer market, the clients want all the functionality and none of the technical details. Providing individual support to each private (or corporate) client was almost impossible, and has put a huge strain on company’s resources.
Luckily, there was (DID Exchange). Within days of signing up for the account, NXvoice was already selling their Moscow and St.Petersburg numbers - without all the support pain. DIDX instantly - and dramatically - reduced the load of customer billing, support and maintenance. To sell our DID numbers, all NXvoice had to do is deliver the number over SIP to the platform's IP addresses - everything else from that point on is handled by DIDX. This arrangement worked so well that NXvoice actually stopped most of the promotion and marketing and simply directed their entire incoming inquiries stream to a single link - We will not return to the old method of business and will stay with DIDX for its reliability and great service to NXvoice.
The Good Days
Russia now demonstrates the fastest pace of broadband service sector growth in the world. With 175 million population and an extremely high mobile subscriber penetration rate, Russia is an extremely profitable market to expand to, with virtually no competition at this point.
Add soaring national currency, insane oil export profits, booming economy, high living standards and you have the most lucrative market you can think of. Pre-2008, it was very much the case. Numerous companies - from startups to corporate giants - were eager to get their foot in the door. Representative offices were springing everywhere across the Russian cities, and the real estate sector was booming. The satellite industry - ISP business sales - was booming as well. However, traditional ISPs were unable to provide something almost every multinational required: a large amount of Western companies who have opened offices in Russia already had some sort of unified SIP/other IP protocol infrastructure in their headquarters. Russian SIP DID numbers became an ideal instrument to interconnect the new Russian divisions to their central offices abroad. Demand for Moscow numbers on DIDX soared.
 1998, revisited
In 2008, what started as of mortgage and derivatives market difficulties, soon turned into a tsunami wave of liquidity issues worldwide, finally reaching Russia. Existing supply an demand chains were broken in almost every industry; in Russia, mining plants and factories were shut, market research agencies collapsed, real estate agents went from 100 sales a day to 1 sale over the 2 months period, and even frozen foods counters at supermarkets suddenly became empty - the suppliers could not finance their contracts with the retailers as banks stopped lending.
However, the virtual numbers service are seeing an even bigger demand. The cost cutting hysteria and mass exodus from posh offices in the prestigious Moscow neighborhoods resulted in virtual number’s subscriptions growth, since the companies previously spending 100s of thousands of dollars per year (and sometimes per month) on luxurious Russian offices were now preferring a $20-$50 per month subscription fee to a Moscow or St.Petersburg virtual number (which can be setup in just minutes on
Thanks to the proactive, future-thinking, ever improving DIDX, we will continue to succeed.

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Edited by Tim Gray

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