“The business side of VoIP is really quite simple,” according to EMS Financial Services manager Christian Betke, who has been helping small VoIP traders and carriers do business for a dozen years.
“There’s a wholesale trading market of minutes. This is all about minutes,” he told Enterprise VoIPplanet in a recent interview.
But it turns out that it isn’t quite that simple. Hence the creation and launch at the beginning of this month of the EMS TrafficBoard, an online facility that serves as a meeting place and a deal-making place for VoIP traders, who are spread out all over the world.
Why now? The booming growth in retail VoIP has naturally driven huge growth in wholesale as well—InStat pegs U.S. wholesale VoIP at $3.8 billion in 2010. And with new operators springing up all over the globe, the need for such a facility became obvious.
The cost of entry into the phone business is very low, according to Betke. “A guy in Dubai has $50,000, he buys a switch and plugs it into the network. He knows somebody, gets a license, and bang, he’s a carrier.
“So, all over the world, these guys are plugging in new units and new routes, and they’re coming in at well below market,” Betke said. “So this is all of a sudden creating a huge marketplace; this is why I have so many customers now.”
Having large numbers of those more than 1,000 EMS customers clamoring for something like this Board was a primary driver in its creation.
So what does the EMS TrafficBoard do? It has two roles, really.
First, as mentioned, is as an industry meeting place. “Before the creation of the TrafficBoard, my customers had to join LinkedIn groups, had to create off-line bulletin boards, had to create their own networking groups to try to meet one another all over the world without a common place for them to do it,” Betke told VoIPplanet. “The TrafficBoard is a Match.com for VoIP traders.”
The other role relates to EMS’s core business: settlement. The TrafficBoard is a place to craft deals in private, but the ingredient that really makes it all work is EMS’s stance as a trusted third party managing transactions for the trading parties and periodically settling accounts.
“I’m a disbursement funds manager;” Betke said. “I’m an escrow company for all intents and purposes. Two guys can get together—no one trusts anybody, no one wants to extend credit; no one wants to pre-pay. So both parties come to me as a neutral third party to manage the transaction.
“Suppose there’s a terminator who’s living in Bangladesh—the end-supplier of the minutes—who doesn’t have credit facilities, who, for cash flow purposes, or just for his own security, wants to start doing business with somebody new. He doesn’t want to get burned; how does he go about suing somebody in Egypt?”
So the TrafficBoard membership is made up of “like-minded traders who believe in the EMS platform—the idea of having a neutral person monitor this—because of all the fraud and all the disputing, all the BS that comes with being a part of this business,” Betke said. (Who knew telephony was such a cutthroat business?)
EMS’s clientele is made up, predominantly, of tier four and five carriers—”the small guys as far as volume of minutes run, looking to aspire to become a tier three. That’s who I evangelize; that’s who I help,” Betke told VoIPplanet.
However, the company deals with tier one providers as well. “They all have their wholesale divisions, and we pay them off as end suppliers regularly,” he said.
So, as the market grows, EMS intends to grow with it, serving the full spectrum of customers. “EMS’s goal is to be a soup-to-nuts, one-stop shop, where the minutes are born, through their delivery,” Betke concluded.