VoIP Adds Spice to Life

And VoIP is also adding spice to the CLEC business plan, challenged recently by adverse FCC decisions.

by Alex Goldman ISP-Planet Managing Editor [February 7, 2005]

Campbell, Calif.-based Sylantro has nothing to do with the herb Cilantro that's a key ingredient in Central American, Caribbean, and Asian cuisine.

Sylantro's secret recipes are all about VoIP, and the company's been cooking for a while, at least in VoIP time. The company was founded in 1998 and its earliest products focused on linking IP networks to POTS networks at the CO.

"A massively scalable in-CO product is very difficult, and that's where we started," says David Illing, Sylantro senior vice president for marketing and business development. "Everybody else started in the easy part of the network and is trying to move to the complex part. It's easier to de-feature a complex solution than to add features."

Fast forward to 2005, and you have a VoIP supplier doing everything from working with Alcatel, Siemens, and Sonus on big iron to helping telcos customize their VoIP portals to working with local CLECs like STS Telecom.

The NFL cities are back
Keith Kramer, executive vice president of Tamarac, Florida-based STS Telecom talks about his company with the sort of optimism we haven't seen since 2000. "STS Telecom is in three major markets now, serving medium-sized and large enterprise customers. The goal is to be in 30 NFL cities."

Kramer says that the FCC's new rules effectively eliminate the CLEC business. "EELs got ditched when FCC Commissioner Martin jumped ship. With that, and the end of UNE-P, it kills the CLEC. Everybody's moving into VoIP, but I don't think every VoIP provider is [or needs to be] a CLEC. We're a VoIP provider moving away from being a CLEC, along with a lot of our friends."

Illing says the change could prove beneficial to competitors. "They move from reselling RBOC services to selling voice applications with the ability to do capital efficient expansion. They start selling new features in new packages."

Kramer agrees. "One of the things we liked about Sylantro is that we saw it could do everything. We can highlight the features that will sell in a specific market or sales channel."

Keeping the sales pitch focused when you've got a lot to offer is a welcome challenge. "You don't want to hit a marketplace with a thousand different features and try to sell them all at once," warns Kramer.

Kramer feels that VoIP providers will do better with resellers than the bigger companies. "SBC, AT&T, Covad, they are all trying to take the old agency model and apply it to VoIP. If you look at VoIP, it has separate components: the service itself with the features, access to the PSTN, and the actual IP handset. Our idea is that we offer the agent an end to end solution. We don't force the agent to go looking for a separate broadband product, for example."

Illing says enterprise customers also benefit. "It's twice the features at two-thirds the cost, and the enterprise customer has to talk to only one vendor. It simplifies buying and management from the enterprise perspective."

Kramer says the STS bundle costs under $40 per month, with handset (which the company leases and retains ownership of, charging customers monthly for the handset and also paying for the handset on a monthly basis).

The future's so bright
Both Sylantro and STS Telecom are optimistic about the future. Illing says Sylantro will focus on greater integration, including working with call centers and with mobile providers.

One recently added feature he is proud of is the ability to provide a simultaneous ring across all handsets, mobile and fixed, POTS and IP.

And there's more features in the works which, of course, he cannot yet talk about.

For Kramer and STS, the goal is simple, "we want a large customer base."

He adds that the sale of VoIP equipment has been especially robust. "We sell it on our website. The consumer has a thirst for newer, better equipment, and we have the cell phone and the digital camera and all sorts of stuff, and we bundle this in with our service to make it more attractive. When Sylantro has a new product, we cannot wait to sell it."

Kramer adds that regulation has, so far, been good to VoIP providers. "Markets go where there's the least interference. You have to give credit to Jeff Pulver, and the outgoing FCC Chairman, to Senator Sununu (R-NH) and Representative Stearns (R-FL). They've worked to eliminate regulatory encumbrances that discourage innovation and investment."

— End