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Talk Like an Egyptian

Light Reading
LR Mobile News Analysis
Light Reading
10/27/2006

As a small importer doing business with partners in the Middle East, Steve Collins, owner of Discoveries, Inc. in Alexandria, Va., has lived through the slow evolution of overseas telecommunications in the last quarter-century.

After founding Discoveries in 1980, Collins first began working with his Cairo-based affiliates by telex, often waiting days for replies. In the early 80s, he says, it became possible to make voice calls from Egypt back to the states, using a line at the central telephone office in Cairo, but it remained impossible to call Egyptian offices from the U.S. Then, around 1985-86 (a period Collins refers to as "the beginning of the thaw of the Great Ice Age"), Egyptian businesses got the option to pay extra for "international lines" that allowed them to receive overseas calls.

From there things gradually got better, to the point where a typical call from Colorado (where Collins and his sales office are now based) cost around 30 cents a minute. Still, his company was shelling out large amounts for phone service -- until this summer, when Collins joined the VOIP Age by becoming a customer of Englewood, Colo.-based VOIP provider IP5280.

Now, Collins can call his Egyptian partners whenever he wants for a flat monthly rate, and customers calling Discoveries are instantly routed to Cairo, Alexandria (where Collins still maintains his warehouse), or Colorado, depending on their needs.

"Now Cairo is just an extension on our phone system," says Collins, who pays for seven IP5280 VOIP licenses and says his telecommunications costs have been halved. "We find ourselves just putting the calls on the speaker phones while we're working and carrying on a conversation across the world."

Two problems solved

Like many smaller regional voice providers and Internet service providers, IP5280 has benefited from the advent of low-cost, near-ubiquitous wireless broadband coverage and the neglect by big phone companies of small and medium-sized enterprises, or SMEs. This week IP5280 added wireless broadband to its service portfolio, announcing a partnership with Littleton, Colo.-based provider WavMax to bring an array of services to small companies in the region including mobile extensions, high speed wireless connectivity, and advanced IP call-management functions -- all at significantly lower costs than traditional phone service.

WavMax offers wireless broadband services over "pre-WiMax," 802.16d technology, with coverage across Colorado and other parts of the region including Arizona. The company, which says its network will be upgraded to full-WiMax, 802.16e when carrier-class equipment using the standard becomes available in the U.S., uses equipment supplied by DragonWave, Cisco, and Trango.

The WavMax/IP5280 partnership is good news to existing customers like Discoveries' Steve Collins, who notes that the only downsides of his existing voice services are that a) he has to contract with a separate ISP, and b) the phones in his Virginia warehouse are not yet mobile, meaning that workers moving through the facility must transfer or break off calls.

"A cordless phone in the warehouse will change all those problems," says Collins, who adds that he doesn't yet use a mobile-VOIP phone because the available models are not yet up to business class.

Carrier quagmire

IP5280 has found a lucrative niche providing smaller companies with services and attention they can't get from the big telcos. IP5280 (named for Denver's mile-high elevation, 5280 feet) focuses on companies of between two and 100 employees, says co-founder and managing partner Jeffrey Pearl. Privately held and founded in January 2006, the company says it has 200 business customers across Colorado. The advent of cost-effective wireless broadband options is a golden opportunity for small providers and their customers, Pearl says -- and one that big rivals like Qwest Communications International Inc. (NYSE: Q) are not taking advantage of.

"There are 57,000 small businesses in Colorado with fewer than 100 employees, and 95 percent of those have less than 50," Pearl points out. "Companies like ourselves and other providers across the country are taking advantage of the real quagmire of the carriers right now -- with all the mergers and acquisitions, the conclusion of the AT&T Inc. (NYSE: T)-BellSouth Corp. (NYSE: BLS) deal, and Qwest in a complete state of confusion -- it's nothing but market opportunity for us."

The WavMax solution, says Pearl's partner John Scarborough, is particularly appealing to small businesses like Discoveries because of its ease of deployment.

"The speed of delivery is key," says Scarborough. "We had a networking event at a bar and grill in Denver. The WavMax guys pulled up in the parking lot, and in 30 minutes time they had aligned this 6-by-12 antenna to the top of the Brooks Building, and they had a 7Mbit/s synchronous connection, ready to go.

"It was astonishing."

— Richard Martin, Senior Editor, Unstrung

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