Broadband margins boom

Neil Watson: SMEs have been wary of converged services for fear of user complaints

Converged communication methods such as IP video conferencing can allow companies across the globe to communicate without leaving the boardroom. By transferring both voice and data over the same line, companies can simplify their IT infrastructure.

These can be big benefits for SMEs struggling to keep their heads above water and savvy resellers need to take advantage of these opportunities. However, while many companies may be keen to keep their broadband connections for these technologies, resellers need to be aware that there is often a lot more to supporting converged services than they may realise.

From a technical perspective, applications such as voice over IP (VoIP) and video conferencing are sensitive because of their real-time nature.

Voice and video traffic demands a certain uninterrupted bandwidth, just as having a face-to-face conversation requires that parties do not interrupt each other. Although most ISPs can supply high bandwidth DSL connections, most lines are contended ­ shared by other users on the network, and at busy times may experience some sort of degradation.

Traditional ADSL has large downstream connectivity but less upstream bandwidth. If the necessary upstream bandwidth is not available, applications will have problems such as dropouts. Previously, resellers were limited to selling low-bandwidth ISDN lines, expensive leased lines, or symmetric DSL (SDSL) which is not widely available. SMEs have been wary of converged
services for fear of user complaints or overspending.

However, by offering DSL connections such as ADSL2+ or by increasing the upstream bandwidth or decreasing the
contention ratio of traditional ADSL, resellers can run converged services over broadband with no interruption.

For the purposes of the reseller, these lines act like a leased line at similar cost to a traditional ADSL line. When pricing a service such as this, the reseller has free rein to price it anywhere between the two, allowing the reseller to upsize its
margins or increase customer loyalty by offering it at a low cost.

While leased lines and SDSL are frequently not viable for smaller SMEs because of respective cost and availability, new technology is available which can help businesses to adopt VoIP and video-conferencing, without needing an expensive line.

Resellers need to be smart and ensure they are providing the right connection for the right application.