Telecoms Equipment: Buying Vs. Leasing

In business, right decision-making is very fundamental. That means, before taking any step, involved parties should come together and decide the best way forward for the firm. When it comes to acquiring telecoms equipment, a business can either buy the phone systems or lease them. The decision you take depends on a number of issues but what you should consider most is whether the decision you make will transform the business. Here are two methods of acquiring telecommunication equipment and they will help you make the best decision.To start with, in business, given the chance, you should always consider buying something that appreciates in value and lease stuff or property that depreciates. This is because if you decide on reselling the property, you will get a profit instead of a loss. Having said that, you should know that telecoms equipment are among the assets that depreciate and from time to time, the technology behind business phone systems is bound to change which will mean the telecoms systems you have today might be irrelevant tomorrow, which will force you to acquire a new phone system. From this viewpoint, leasing telecoms equipment seems to be the better option for a business but do not rush into making such decision. You should first carry out a thorough analysis considering the following.
Before deciding whether to buy or lease telecoms systems, you should consider the availability of cash and the time you are required to make the payment. When leasing VoIP phone systems or anything, there are interest rates that leases attract. Also, in order to get money to lease the business phone system, chances are you will have to borrow, a move that equally attracts interest charges. What you have to do here is to analyze and see whether paying double interest rates to get telecommunication equipment on lease will be beneficial in the end or not.
You should also consider tax benefits that come with leasing telecoms systems and the tax implications of buying these equipments. When calculating this figure you should include all tax credits that you will accrue when you buy the telecoms equipment. All in all, the point is that you should consider the financial implication of either leasing or buying business phone systems. When doing the calculations, always involve your accounting team. As much as leasing comes with a number of tax breaks, always consider the amount you will pay to purchase the telecoms equipments and the lease rate. Also, consider the lifespan of the technology; if it is likely to outlive the lease, you better buy. Do not forget the financial position of the firm before acquiring phone systems.
At times, you should do both of buying and leasing. That means assessing which telecoms systems can benefit your company if you were to buy it instead of leasing. For instance, you can lease the hardware and buy the software. Here is how it works. Telecoms equipment like PBX and VoIP phone systems run on software which has to be bought or can be got for free. If you don't anticipate a drastic software change in the near future, you can buy it and lease PBX hardware. Whether you want to buy or lease telecoms equipment, not you should carry out a meticulous comparison before deciding.
Brad Mayhew is the author of this article on Telecoms.



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To want to start a VOIP business in Uganda?

I have recently been reviewing the business model for a company that is dealing in VOIP. For the uninitiated, VOIP stands for Voice Over Internet Protocol(VOIP). It is basically a technology/ies that allows telephone calls to be made over the internet rather than over traditional telephone lines.
I set out my simple and straight forward observations.
First the cons (of course)
1. Internet stability.
Internet in Uganda can be very unreliable and where it is reliable it is very expensive. Now this is very critical as to make calls over the internet you need VERY RELIABLE internet and so this is the starting point for anyone looking to invest in this sector. It is however not uncommon for an ISP to charge $1400 per month for 64 kbps. That's not alot of bandwidth as a typical telephone call requires about 8kbps at any time and so 64kbps supports only about 8 simultaneous conversations or less depending on internet conditions. The good news of course is that this is changing with fibre optic cables being laid all the time and so internet costs reduce. My best advice, use ADSL and shared bandwidth. UTL does a good job here, with a great value and generally reliable product if you can get the telephone line.
2. Competition
VOIP prides itself in being cheaper than the traditional telephone companies and many a VOIP provider will give you rates that are much cheaper than the networks. That was until recently. Many telecom providers in Uganda for example Orange have great international calling bundles that give the VOIP provider a run for their money. The VOIP provider is therefore having to compete with the telecom companies in offering customers international calling services. You have to therefore be prepared to look at your financials closely and constantly lest you fall into losses so do yourself a favour, get a good accountant!
3. The Exchange rate
The Uganda shilling is depreciating against the dollar and this may continue to be the case. In 2006 for example the rate was Shs 1,700 to the dollar. In 2011 at the time of writing, it is Shs 2800. For VOIP,this is critical as the main purchase is "digital airtime" from international VOIP providers. This is purchased in dollars and as such the prices charged to customers need to factor in the exchange rate, in addition to ensuring remaining competitive against the BIG BAD WOLVES (I mean the telecom companies).
4. Technology know how
VOIP is a specialised sector and so it of course requires someone with interest but this is not such a significant matter as employing an IT person will help reduce the entreprenuers need to worry about this.
5. Start up capital
From my rough estimates, a typical VOIP business (say a phone shop to support 6 phone booths) can ideally start up business from as little as UGX 8.7m. This should cover; rent at 500k per month (including 2 month deposit bringing it to 1.5m), internet installation and subscription; 700k, purchase of the VOIP and computer equipment; 1.975m, furniture/ fittings; 1m an inverter; 2m, legal and related costs; 700k and signage(to advertise); 500k.
From my analysis, a VOIP business on its own is however not profitable and therefore it is ESSENTIAL to also have an internet cafe running side by side. The costs of the internet cafe side plus the VOIP side stripping out the shared start up costs like rent and inverter will be 20,383,275. I have written about an internet cafe set up costs separately in the article on the internet cafe. The total start up cost is therefore about Shs 20m
AND NOW THE PROS
1. Profitability and quick return on capital
Like the rest of Africa, In Uganda there are tremendous growth opportunities in the ICT/ communications sector and per Uganda Investment Authority, this is one of their key sectors for investment. Call traffic continually increases as Ugandans enjoy higher incomes. Despite the biting inflation, there is a continual increase in call traffic. VOIP is not being left behind and assuming ICT sector growths averaging 25% per year turnover averaging Shs 53m would not be an exaggeration. On the basis of my knowledge of this sector, I set out a summary profitability picture as well as the return on capital (this includes a diversified model which includes an internet cafe). All estimates are in UGX. The exchange rate to the USD is about 1 USD = Shs 2,700.
Gross profit
1.Revenue- calls: 65,520,000. Assuming 7 days a week at 180k per day.
2.Revenue- internet: 13,884,000. Assuming Shs 290k per week from 4 computers and multi purpose maching.
3.Cost of sales: -49,140,000. Assuming it is 75% of revenue for calls on basis of exchange rate and reseller margin.
4.credit transfer cost: -1,228,500. Assuming 2.5% of cost of sales
5.Franchise fee: - 655,200. 1% of revenue-calls.
Gross profit: 28,380,300
Overheads
Rent: Shs 4,800,000
Internet: Shs 3,840,000
Staff costs:Shs 6,000,000
Other overheads: Shs. 1,800,000
Total overheads: 16,440,000
Net Profit: 11,940,300
Capital investment: 20,383,275
Return on Investment: 1.71 years.
2. Return on capital
On the basis of the above profit picture therefore, this business should be able to have a return on capital of 1.71 years. A word of caution here. The model above assumes full capacity growth and so may not necessarily reflect a start up business in say its first few months. In addition the model assumes the internet cafe and call shop will run side by side and concurrently. I have done a separate analysis of the VOIP model on its own and from my analysis it will take 90 years to get a return on your capital! In Uganda, there is therefore no alternative for a VOIP investor but to integrate the call shop and the VOIP services.
3. Diversified services
Despite the fierce competition, a VOIP business can survive by being diverse. Many VOIP providers do not only provide low cost international calls. They also provide other related services like cheap calls on your internet enabled phone, a foreign number(for example USA) even while in Uganda and use of VOIP in homes/offices. Some like http://www.telebm.com provide a special Uganda rate. In addition many integrate an internet cafe within their models as well as selling telephones and accessories. The diverisifed services spread the over head costs and enable continued profitability. In the profitability analysis above, I assume this business is diverse offering both VOIP and internet cafe services.
4. Franchise model.
The beauty about a VOIP business is that it is very scalable meaning you can keep on expanding to other towns, other urban centres, other countries. The typical VOIP provider will give you a software management system which can be accessed anywhere on the internet (after all since calls are made over the internet, call logs are likewise internet based). This gives a key advantage of remote monitoring for the business owner. You don't have to necessarily worry about revenue as you can remotely monitor the sales(calls) on a real time basis because the call logs display calls(and costs) as they occur. The model can therefore be replicated by having you the business owner setting up agents who also get access to your system. I believe this is the model that http://www.mafudian.co.uk a Ugandan VOIP company is promoting.
SUMMARISING AND THE FINAL WORD
First the numbers
On the basis of my analysis:
* Capital investment(internet and VOIP equipment) (A): Shs 20,383,275
* Revenue per year: Shs 79,404,000
* Profit per year (after all expenses (B) is Shs 11,940,300
* Return on capital(years to get capital back)(A/B) is 1.71 years
Now the basics you must get right before investing.
* Internet stability and reliability. Get a good ISP who supports VOIP
* Diversification of services. Don't only do the VOIP services, consider an internet cafe, multipurpose machine, WIFI hot spots or even selling cell phones and related accessories.
* Location, Location, Location. This business best thrives in an urban setting with heavy traffic particularly of business users.
* Get an IT person, VOIP can be tricky to continuously configure.
FINAL WORD, YES OR NO?
This is not an easy sector to invest in with internet stability as well as the fierce competition with local telecom companies who now offer some good international calling bundles. Furthermore the exchange rates are continually changing due to the falling shilling hence potentially eating into the profit. I know many VOIP businesses that have failed and so to invest in it you need to have not only technology know how but like looking at the financial numbers as the margins can be very tight! A business which has taken off can however enjoy a significant amount of turnover and diversifying and expansion through franchising seem to hold the key to success.
As a chartered accountant with over 8 years of audit experience with various clients in Uganda, The Bahamas and currently the United Kingdom I have dealt with several sectors including banking and financial services, manufacturing, public sector/Donor funds, entertainment and Agriculture which has given me the inside knowledge of several businesses and their performance.
These writings are my observations and research on investing/ doing business in various sectors in Uganda. You can read more about me and the series at my website: http://investinginuganda.yolasite.com/the-sector-analysis.php

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What kind of Internet connection is suitable for VOIP?

Voice over Internet Protocol (VOIP) phone systems are becoming more and more spread. Attach the phone voice traffic over your Internet connection, rather than a dedicated wireline send. They offer advantages clearcut old old-fashioned cable connections: lower costs, better audio quality, more feature rich service as are common.
But many people have found out that not all high-speed Internet connections are the same. The most available Internet connections at this time fall into four groups:
DialupDSLCableFiber optics
VOIP phones use approximately 80 KB/s in each direction when a call is active. You use almost no bandwidth when they are idle. So, the first consideration for any VOIP system is the full range available. In a typical small office where no more than 5 phones always in use are at once, the required bandwidth would be up to 400 KB / s and 400 KB / s down.
But this may be not your only concern; You can also have computers to use the same Internet connection for Web surfing and e-Mail traffic. Computer traffic bandwidth varies from next to nothing to display a Web page very high download software, music or videos. And by sending an email with a large attached photo available bandwidth to almost zero.
When that happens, phone is very jerky movement, displayed with outbreaks of silence under the words.
So, no matter what type of Internet connection you have, you need to can restrict the bandwidth, the computer draw. This means that some sort of rate limiting switch between your Internet connection and the computer at work is to be connected. (VOIP phones have not so limited because they no matter draw which does not exceed 80 KB / s.)
With VOIP-installations the preferred connection would fiber, with a typical range of 10-20 MB / s direction in the following-up and down. The computers on 2 MB limit and they will hardly notice.
The second best type of connection is usually cable, where bandwidth 10 MB / s down and 2 MB / s up together. The computer on the line should be on 2 MB down and 500 kb to limited. Again, they'll find hardly any reduction.
DSL connections get very risky. DSL providers often use DSL modems that contain a system called SIP ALG (application level gateway) (by default). The implementation of the SIP ALG has been very badly done, and may often cause problems with VOIP telephones. Typical problems range from no connectivity to intermittierenden call drops and a variety of other systems. There is a list of modems with this problem on http://www.voip-info.org/wiki/view/Routers+SIP+ALG. If these modems one and see no problems with your VOIP service, call your DSL provider and ask for, that they SIP ALG. disable
DSL connections suffer from bandwidth problems because they are usually asymmetric (sold as ADSL). These connections can up to 2 MB / s download speeds, but only 500 KB / s or even 256 KB / s upload to have. If you had to pay attention earlier in this article, you can see that is a link for 256 K only 3 simultaneous calls IF NO TRAFFIC is used by computers ON THE LINE supported is.
The bottom line: If you're thinking of installing VOIP and an ADSL connection, check everything out thoroughly, before any commitment.
Finally, there are dialup. Dial-up connections provide no more than 40 KB / s in each direction. A Word, they are not suitable for VOIP calls.
The moral of this story is this: If you problems with your VOIP system, first a look at your Internet connection. It is a rather perpetrators as your phone system or your VOIP provider. If you are considering only a move to VOIP, you get all the facts on your Internet connection before you call of even a VOIP provider.
William is Marketing Director for Business Phones.US, a provider of VOIP systems for small and medium-sized enterprises. For more information, visit his website at http://business-phones.us/. You can reach him via e-Mail at support@business-phones.us or by phone 1-866-553-3833. We welcome your questions about VOIP installations.
Business Phones.US is a division of Xantek, Inc., based in Las Vegas, Nevada, United States.

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VoIP Phone Systems Features: For Over 25 Users

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VoIP phone systems are the most practical and cost-effective investments for large offices - any office that has over 25 users on and off-site. Below is a brief guide to help determine the selection of VoIP phone systems for large businesses - five items to consider prior to making a purchase.

On or Off-Premises?

The first item to consider is where the VoIP phone systems will be located for large businesses - should they be hosted or on-site? Hosted VoIP phone systems are hosted by the company's Internet Service Provider (ISP), and are dependent upon external forces for quality control and maintenance (more on that below). On-site VoIP is hosted 'in-house' - meaning that the locus of control is placed on the business. Quality and maintenance control can be important for large businesses - so those with over 25 employees (including contractors and consultants) may wish to invest in VoIP services on their own premises.

Consider Employee Needs

Ask employees what would make life easier for their calling and communication needs - and get a general picture of how the employees wish to use the system. The sales team may wish to have FMFM (Find-Me-Follow-Me) capabilities for communicating on the road, while customer service and support may wish to have advanced conferencing capabilities when working with customers and other departments. Generate a list of wants and needs in order to be prepared to pick the best features VoIP phone systems can offer.

Consider Integration of Systems

Enterprise Resource Management, Business Continuity Planning, and Customer Relationship Management are three areas where VoIP can successfully integrate systems in order to increase efficiency and cost-savings. Decide ahead of time how they should be integrated with VoIP in order to get the most accurate quotes and pricing in order to make a final decision.

Who will do the maintenance?

This ties in directly with deciding whether or not the VoIP service should be on or off-site - because maintenance and repair costs with an outside source can be more expensive than having an on-site employee regularly paid to keep the service in place and at top-quality.

ThinkCompatibility

Compatibility ties into integration of business systems - by knowing ahead of time what functions will need to be integrated into the VoIP phone system, the company will be prepared to detail the needs to the vendor, thereby getting the most accurate quote the first time, and no surprises.

When choosing VoIP phone systems for large offices, it's important to keep these five items in mind prior to selection. While the systems may be similar, they do not all carry the features and services a large business will need. Planning prior to purchasing can make the investment into a VoIP system well worth the time spent in future cost-savings.

I suggest you take the time to visit the website of Steve Mike levy at: http://www.voipphonesystemsfinder.com/ and learn more about the changing world of Business Phone Systems.

If your looking to purchase an Office Phone System you may also receive access to instant price quotes at: http://www.VoipPhonesystemsfinder.com/choosing_voip_system.php

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VoIP - trendsetter in mobility

Standard PSTN phones used for personal, commercial and industrial purposes are slowly by VoIP or voice over Internet Protocol network replaced and will create a niche for himself at the same time. Due to globalisation find people and businesses more cost-effective communications solutions. VoIP will start as android, Ios_base::OpenMode VoIP services for mobile technology platform on their mobile phones more popular. With the help of the SIP clients, the signaling protocol that is used for voice and video communication sessions over the Internet mobile devices can be converted to a VoIP phone. VoIP technology guarantees a completely new experience of functionality for the mobile market to offer. Mobile VoIP is all set, merge to a major role in various industrial sectors.
With the advancement in technology, majority of wireless operators try to make VoIP consumers available for mobile options. Because VoIP has been a reliable technology for communication, many industries around the world, try mobile make existing VoIP networks. Two factors play important role in VoIP. Firstly involves integration of SIP client software with existing hardware and the second applies to the existing platforms open will call for dual mode, which are in turn required for a change from the standard mobile networks to IP-based networks.
Broadband capabilities and other features that are offered by every conventional telecommunication system, VoIP offering not only the same but has become a hot election in the near future. Which enable applications such as Skype and Fring, works for most phones free or low-cost international call as the iPhone, Android of based phones, BlackBerry and the same on Wi-Fi enabled devices can be used as iPod touch. The technology changes at a very fast pace, VoIP providers and app development company come with applications that line of iPad, BlackBerry would be compatible with tablets or Android tablets.
VoIP is always a whole fury and with the introduction of 3 G and 4 G devices mobile VoIP is expected to more than 120 million subscribers in 2012 and over 350 million subscribers by 2013 to reach. This massive usage is by many researchers in the various reports discussed on the next generation of the mobile market forecast. By the year 2019, it is expected that more than 70% of calls via mobile via VoIP networks. You can make that VoIP is to ensure the technology platforms on mobility.

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Tips for choosing a hosted telephony provider

It is important to determine the flexibility and range of services that a provider offers. If a company does not provide all the services you need, make a less stressful and less time consuming process of conversion. It is also useful with a single provider concerned, such as the administrative costs of dealing with several soon to can provide.
It is important to ensure that a stable business operates your potential suppliers. In an emerging market, there are many companies who condemned to fail due to lack of expertise in the industry, so sure to do your research.
Some companies are funded by venture capitalists and intends to sell the business as a significant profit. Necessarily mean if a company changes hands, is also the way in which it is running, could mean the unwanted changes to your service and a potential increase in the cost. To avoid this situation need a reliable and proven to instruct the provider.
The right provider will make your transition to IP telephony as easy as possible. If problems arise, you must be sure that your provider has the necessary backup resources.
The point of a hosted VoIP system is that it completely cut off site, spend IT managed is. So if possible, it is always advisable, the team for the management of your system responsible. If you in your Office, would trust then why allow them with such a fundamental part of your company do?
Although VoIP services telephone costs can reduce, the best choice is rarely the cheapest service. Should your chosen provider are themselves unreliable, then money you have saved, takes the cost of a change by choosing a cheaper provider. You should receive official documentation on pricing structures before the setting up of the system and the fees and charges should be documented clearly and transparently.
As with any service, no matter how well the provider there a chance that unforeseen problems interrupt your service through no fault of you or your contractor. You must check for this reason that the provider clearly in around the clock support services has invested. You should treat immediately the ability to inconvenience for your company have. If you questions about targets and customer support policies.
Follow these guidelines and you should consult a reliable and cost effective hosted VoIP provider.
Article written by Mark Palmer, pioneer in hosted IP telephony (VoIP) online marketing manager at trade mail - UK services business, offers a wide range of secure, integrated, and cost-effective managed cloud solutions.

To learn more about hosted VoIP, please visit http://www.intechnology.co.uk/

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VoIP phone systems: Reliable, flexible, cost effective and feature rich

VoIP or voice over Internet Protocol, has overtaken clunky old analog systems. With VoIP phone systems, you have all the advantages of the analogue service without the disadvantages. We have a look at how to compare.
Flexibility
Perhaps, the first thing you'll notice about these phone systems is their flexibility. With traditional analog systems, you have an appointment with the telephone company, and they have to come and set up, relatively steady with an expensive, difficult to maintain system.
With VoIP phone systems you have neither of these issues. Although it will select you to an initial installation of the technological support for the company, you're pretty much good to go on your own you have the initial installation to complete. You can most of the changes, including adding additional options, features, or user through an easy to use Web interface, no additional technical support required handle.
Tons of features, free of charge
Analogue telephone services will tell you that that definition, but that is not really true you. Although they offer the most features of IP phone systems, you will be charged, for them by the service. With VoIP, numbers you (forwarding, voicemail, you call functions such as call waiting, caller ID, etc.) are your monthly service fee, and most of the features at no additional cost.
Better call quality
Again, the most analog telephone services will tell you that VoIP sound quality analog is inferior quality, but again, this is not true. In fact, since VoIP from their infancy stepped out and now a mainstream service is, it is almost as reliable as analog telephone services, with much better sound quality. Because converted to analog signals to digital, you get faster clean transmission of signals, which better sound quality for Sie--also for long distance or overseas calls.
She will not charge for IP phone systems in long-distance, either
You already received many great features free of charge on your monthly fee, but these systems telephone will pay no extra for the most long distance calls, either. Domestic long distance calls are included; almost always in company telephone IP plans While you probably a little bit for long distance calls will pay in other countries, the costs are much less expensive when compared to conventional analogue services.
Reliability
Reliability is perhaps the only area in which trumped analogue telephone services VoIP services. If high speed Internet was in its infancy, it in fact have a problem reliability compared to traditional analogue services.
Fast forward 10 years, though, and that is a disadvantage quickly disappear. As well as it established a while analog services lasted, so that she was almost fool-proof, so he also has some time for VoIP telephone systems, which reach the same milestone being implemented. These days, but you would be hard pressed to most unreliable call VoIP service. In most cases, it is only as reliable (and perhaps even more reliable for certain calls which, as in foreign calls) is like analog service, without the disadvantages.
I suggest that you take the time to visit the website of Steve Mike levy on http://www.businessphonesystemsfinder.com/ and find out more about the work environment of business telephone systems.

If you buy access to instant price quotes to get you looking for a VoIP phone system can:
http://www.BusinessPhoneSystemsfinder.com/voip_systems_business_office.php

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