Vonage To Launch VoIP Phone Service To Small

Stamford, Conn., Firm Picked To Help Launch VoIP Phone Service

January 20, 2005

By Richard Lee

A leading player in the emerging VoIP - voice-over-Internet-protocol industry has chosen a Stamford firm to be a teammate in rolling out a new service to small-to medium-size companies.

Stamford-based S/CM Partners LLC will be one of several representatives of vonage-forum.com/vlink6.html">Vonage, as the Edison, N.J.-based broadband telephony provider prepares to offer its new technology across the country within the next several weeks. In preparation for the rollout, S/CM and Vonage conducted a pilot program with companies in southern Connecticut.

The pilot ran from October to early December 2004 and focused on two businesses with at least 36 telephone lines and an average monthly telephone bill of $ 5,000. Both are S/CM clients in the Stamford area -- one is a real estate agency and the other is a law firm.

"After about three months of VoIP, overall phone costs were reduced to approximately $ 1,800, and customers noticed no noticeable service or performance issues," said Stephen Kirby, president of S/CM Partners, a corporate information technology provider. "We tested hardware in a live environment."

Kirby, who acquired S/CM Partners in 2003, said he has followed VoIP progress for three years and was not convinced he was ready to get involved until one of his vendors connected him with Vonage. His firm today also uses the system.

"It's transparent to the phone system. Nothing changes. It's all programmed on the back end," Kirby said, adding that no training is required of a company's personnel.

"Since calls are just bundles of data, they can easily be integrated with your PC, cell phone or PDA," he said. "You can, for example, have voice messages e-mailed to you when you're out of the office. In essence, they (clients) will be paying a set monthly fee based upon the number of users, similar to users of browsers such as AOL."

In a recent survey, Deloitte & Touche noted that cost reduction is the key driver in VoIP deployment. The survey indicated that 79 percent of early adopters are "mostly" or "highly" satisfied with the technology. Stamford-based Gartner Inc. predicts that by 2008, 23 million residences and 3.6 million businesses in the United States and Canada will be using VoIP. S/CM's territory includes Connecticut, Massachusetts and Rhode Island, as well as metropolitan Tampa, Fla., where several of the Stamford company's vendors are located.

The Stamford business is one of several resellers Vonage is working with across the country.

"S/CM has good connections with the business community in southern Connecticut that we'd like to leverage. They are the go-to people for IT solutions," said Vonage spokeswoman Brooke Schulz. Vonage offers VoIP service to residences and home-based offices, but needed to refine its technology before it started marketing to larger businesses that need more lines.

The company has more than 400,000 lines on its network in the United States, Canada and the United Kingdom.

Vonage has been more successful in marketing its services than most others in the VoIP industry, said Rick Tehrani, president of Norwalk-based Technology Marketing Corp., which is hosting the Internet Telephony Conference & Expo next month in Miami.

"It has spent over $ 100 million in marketing," Tehrani said, adding that Vonage started to heavily promote itself when broadband Internet service increased in popularity. "You need broadband to have good VoIP service. Their timing was impeccable. Vonage also was the first to let you keep your own phone number."

The Miami event is the largest VoIP trade gathering in the world, and its growth is an indication of the growing use of the technology, said Tehrani, who expects 100 exhibitors at the February show and 300 to 400 participants. "We grew 100 percent last year, and we'll be up 100 percent this year. This market is getting hotter and hotter. We think it's a good barometer for the industry," Tehrani said.

Government regulation and taxation of VoIP remains cloudy as federal and state agencies grapple with the technology.

"The states are trying to tax and regulate VoIP, and the Federal Communications Commission has told them this is a federal issue. The federal government has got to set down some laws in terms of VoIP," Tehrani said, warning that allowing states to define their own regulations would be a nightmare for a company like Vonage.

Vonage does pay taxes because its calls terminate over a regular telephone network, he said.

Vonage To Launch VoIP Phone Service To Small - Medium Size Companies