Small to mid-sized businesses are seeing the value of VoIP, but they are also insisting on quality service and that is turning them away from best-effort services, according to Lisa Graham, senior vice president and general manager of Covad Communications’ Wholesale Division.

Graham has good reason for wanting to pitch quality – Covad sells a wholesale data service, called Voice-Optimized Access, that enables service providers to bundle data and voice for SMBs while protecting voice quality.
Graham says it’s an offering that is gaining market traction.

“We wholesale to all kinds of partners doing VoIP into the small and medium business space,” Graham said. “We are getting more and more traction from partners in the market, but we are also seeing partners struggle with quality of service and ensuring customers are getting exactly the service they want and are used to from the phone companies.”

Because there is price sensitivity in the SMB market as well, some VoIP players allow customers to purchase their own broadband for services, “but they are finding it is not the quality they are looking for,” Graham said. “We are talking about the importance of bundling a quality of service, and not just VoIP.”

Graham points to the fact that in 2006-2007, the VoIP market grew 77% in revenue and opportunity, while Covad’s Voice-Optimized Access grew at 200%. “We believe our wholesale partners are finding it more and more important to manage the data aspect of their service as well and to provide a data solution that provides QoS,” she said. At the VONx show in San Jose, Calif., this week, Graham’s presentation offered up number from Covad partners that showed bundled services now comprise 50% of the product revenues from one Covad partner, and also cited a 90% decrease in voice quality trouble tickets since the partner started using Voice-Optimized Access.

Voice-Optimized Access runs over DSL or data T-1 lines, Graham said, and it can prioritize voice traffic throughout the network and offer a business-class Service Level Agreement, guaranteeing minimal packet loss and maximum throughput and quality.

“Service providers face common problems if they are not managing QoS end-to-end, they really can’t control the quality of the voice service,” Graham said. “What we are doing allows them to provide their customers with a bundled solution in the market.”