VodafoneZiggo Case Study. Telecom Technology as a Strategic Asset: One Startup's Winning Story

Every telecommunications firm, startup and established carrier alike, wants to be known for a strong business model supported by a rock-solid technical platform. In today's highly customized, market-specific environment, however, it's unusual for a single platform to satisfy such goals for enterprises at both ends of the business spectrum.

More unusual still, is when it all happens as part of a single deployment. When two of Europe's most progressive telcos shared such an experience, the result affirmed the power of infrastructure to create opportunity - and ultimately, success - in the highly competitive telecom industry.

A New Model

The essence of entrepreneurship is to exploit gaps in the market. So in 2006, when technology first made it possible for telco innovators to enter the retail VoIP services without relying on incumbents for technical infrastructure, Gert van den Berg, an industry veteran who at the time was a business development executive at Dutch telco Carrier1 B.V., took the leap.

PortaSwitch logo At the time, PortaOne's PortaSwitch was the only fully integrated product that spanned customer management, service provisioning, rating and billing, along with a full spectrum of switching capabilities. Once van den Berg discovered PortaSwitch and read its documentation, he knew he had found not only his core infrastructure, but also his business model.

"PortaSwitch could be divided into virtual environments - and those partitions can be rented out to resellers," he stated. "That became our strategy. We knew that as a startup we would never have the resources to take on the consumer market in a big way, nor would we have credibility with major corporate customers, like KPN had. But with PortaSwitch we could take on the small-to-medium business market by reselling our capacity to distributors."

"Our goal was to challenge the major incumbent in the Netherlands, KPN, with a VoIP platform that could offer more retail features at a competitive price," Gert van den Berg recalled. "Finding an independent technical platform versatile and scalable enough to support the task, however, wasn't easy."

His new company, Breezz Communications Group B.V., was a tiny office with only three employees. The fledgling telco negotiated an evaluation license for PoBreezz logortaSwitch to do a two-month pilot; in July 2006 it purchased a commercial license. With its technology and its business model in place, Breezz was on its way.

Enabling Change

After little more than a year, van den Berg and his partners reaffirmed their willingness to challenge convention by adding a non-commercial staging platform - a first for both PortaOne and Breezz. With an in-house staging system, Breezz could achieve four very important objectives:

  • Configure and safely experiment with new software configurations in non-production environment.
  • Evaluate scripts and applications that were developed in-house.
  • For new maintenance releases of PortaSwitch, train employees and run simulations that validate network performance before deployment to end users.
  • Test other improvements and features developed by PortaOne.

While this last use covered general PortaSwitch improvements such as migrations to new OS versions, its main function was to test the various custom features Breezz requested. Over time the company asked for a number of billing, administrative, call control and compliance features - requests that were filled by PortaOne, tested on Breezz's staging platform, then successfully implemented.

Today, many of our most successful customers have the same kind of staging system. Its use was pioneered by Breezz. The staging platform's relatively low annual support fee is seen as insurance against events that might otherwise result in costly system damage."

Roman Khalenkov, Sales and Marketing Director for PortaOne

Seizing the Future

Breezz continued to commit to PortaSwitch as it grew. It upgraded to the product's Proinctus version for added capacity and redundancy in 2008 and in 2009, became one of the first adopters of PortaOne's Premium PortaCare support contract.

A year later and now debt free, the company took its biggest step yet. With almost 150 resellers under contract offering a full range of Internet telephony services to end-users, and nearly 40 million call minutes a month running through its system - yet still employing less than twenty people - van den Berg decided to step away from day-to-day operations. He hired a professional CEO to run the business while he evaluated opportunities for the company, now considered a true innovator in the Dutch telecom industry.

Vodafone-Ziggo logo That opportunity presented itself in an acquisition offer by VodafoneZiggo, the Netherlands' largest cable operator, which purchased Breezz in October 2011. "I knew that giving the future of Breezz to Hendrik de Groot, VodafoneZiggo's Chief Commercial Officer, and the other members of VodafoneZiggo's management team was the right decision," van den Berg said. "The robust enterprise we created would continue to prosper within VodafoneZiggo."

Catalyst for Growth

Corporate acquisitions often have checkered outcomes. Either the smaller company totally disappears within the conglomerate, or its assets wither inside the new structure and ultimately fail. In Breezz's case, however, its novel technical capabilities proved to be a unique stepping stone for VodafoneZiggo.

Understanding the flexibility and scalability of Breezz's infrastructure and its ability to foster imaginative new products and services, VodafoneZiggo began experimenting with Breezz's PortaSwitch deployment. Within months it had requested 11 new features from PortaOne; by May of 2013 it purchased a second set of PortaSwitch licenses including PortaSwitch Procinctus, site redundancy, and a separate staging platform.

VodafoneZiggo's original plan was to operate Breezz, with its business model and PortaSwitch infrastructure intact, under the banner of VodafoneZiggo Business. That plan was executed - but it also inspired VodafoneZiggo to create something more. In July 2014, VodafoneZiggo unveiled Ziggo BAPP, a residential consumer service for fixed-line customers. The service allows users to make calls via Wi-Fi from anywhere in the world, using a smartphone or tablet, at the same rates as their fixed line subscription.

Powering the free Ziggo BAPP app's account management, billing, and SIP credential delivery functions, is PortaSwitch. As a result, VodafoneZiggo today operates one of the largest PortaSwitch deployments in the world.

The Breezz/VodafoneZiggo partnership ably demonstrates how a small but very focused and aggressive startup can grow from scratch to become a very important player in a highly competitive and demanding market. It's a rare instance that a single infrastructure product can be accessible enough for small, hungry telco startups that are very cost-conscious - and yet also be robust enough to support the offerings of a major carrier. PortaSwitch has proven itself to be that kind of solution."

Roman Khalenkov, Sales and Marketing Director for PortaOne
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