Home > Uncategorized > Looking Back – Press release from days at Broadvox

Looking Back – Press release from days at Broadvox

Internet phone firms call for customers
4:30 am, April 5, 2004
Two Cleveland companies, Broadvox LLC and gee-fon, are offering local and long-distance phone service over the Internet for customers seeking an alternative to traditional phone companies.

Broadvox, at 1228 Euclid, launched its service last month for residential customers. The company is sending about 300,000 advertising fliers to Northeast Ohio residents and soon will begin a national advertising campaign using TV, radio and direct mail.

Residential service also has launched in Canada, and the company plans to offer service in all 50 states by the end of the year.

Gee-fon, a subsidiary of Phoenix Telnet LLC, also has launched Internet calling and wants to sign up 40,000 customers by year’s end.

Both companies are in the relatively new business of providing telephone service by using the Internet to transmit phone calls, thereby bypassing the telephone infrastructure used by typical telephone companies. A few years ago, the audio quality for such calls was poor. The technology recently has improved enough to provide a practical alternative to regular telephone service.

Broadvox president Jeffery Williams calls attention to the company’s $29.95-a-month service that includes unlimited local calls and unlimited long distance calls in the United States and Canada. The price also includes voice mail, caller ID, three-way calling and a ‘friends and family’ number in another area code so that a customer’s most frequent long-distance caller has a local number to dial.

Mr. Williams said to use his service, a residential customer needs a broadband Internet service (such as DSL or cable modem) and an analog telephone adapter, which the company provides. A computer isn’t needed. A typical customer might pay $76.85 the first month, including a set-up fee of $34.95, then $11.95 for shipping and handling for the phone adapter.

If a customer pays $30 a month for Broadvox’s service and another $35 for broadband Internet service, that’s a total phone bill of $65 a month. That’s probably the average amount of money a customer might pay for normal phone service and a slow dial-up Internet service, Mr. Williams said.

Mr. Williams said Broadvox has about 50 employees. The company is busy hiring new employees to provide customer service for its new residential offering, and it expects to have around 100 employees within six months, he said.

Mr. Williams said when he joined Broadvox in March 2002, a few months after selling Now Online, his Internet service provider, the company was a few months old and had about a dozen employees. The company began transporting calls long distance for other phone companies, and expanded last year into offering telephone service to businesses.

Broadvox is privately owned and doesn’t disclose revenues. Mr. Williams said revenues last year were ‘in the eight figures.’ He said the company is profitable and is financing its expansion from its own revenues.

Gee-fon’s offering requires its customers to have a computer with a USB port, but it doesn’t require a high-speed Internet connection. Even dial-up will do, said Tim Khayat, gee-fon’s vice president of operations.

Mr. Khayat said his company’s service officially launched Feb. 11. Customers can get local phone service for $15.95 a month. Local calls and long distance calls to the United States and Canada cost $39.95 a month.

‘We have had several hundred people beta testing the system and using it as a beta service for three months now,’ he said. The company’s business model calls for about 40,000 customers by the end of the year.

‘We feel real confident hitting that number,’ he said.

Gee-fon customers who are hitting the road can plug their telephones into any computer, as long as they’ve taken a few minutes to download the necessary software, Mr. Khayat. If a customer is visiting a friend and wants to use his computer to make long-distance calls, it doesn’t matter where the computer is.

‘He could be in China,’ Mr. Khayat said.
(Published Crains Cleveland Business)

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