Small firms line up to provide VoIP service as market grows

The stampede into Internet telephony this year rivals a time more than a decade ago when hundreds of entrepreneurs jumped into the long-distance business.

In the late ’80s many people discovered they could buy large amounts of long-distance capacity from firms like Sprint and AT&T at deep discounts.

JON VAN

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They could then resell the service in smaller chunks to businesses and consumers at attractive rates and still turn a profit.

Now many firms have found that offering voice over Internet protocol service is much less expensive to get into than the traditional voice telephone business. And they’re eager to give it a try.

Some experts say VoIP will decentralize traditional phone technology much as PCs displaced mainframe computers and revolutionized information technology.

That could mean trouble ahead for the unwary.

"A year from now, there may be 100 companies offering VoIP service," said Michael Kallet, chief technology officer of ICG Communications, a competitive telecom carrier that offers VoIP to business customers in Chicago and other markets.

"There’ll be a lot of small companies drawn into this and price wars," said Kallet. "It’ll be a real mess."

Kallet’s concern is the technology may get a bad reputation from firms that provide poor service.

There are many forms of the technology–all of them called VoIP–available to businesses.

ICG and others offer a centralized flavor that enables a business to get the flexibility and cost savings of Internet telephony without requiring them to buy a lot of new equipment.

This is comparable to Centrex services traditionally provided by phone companies, and many large players such as SBC Communications and AT&T also provide this kind of VoIP.

Others will do so soon. John Shave, chief at Chicago-based Globalcom Communications, said his firm will soon roll out service.

"It’s a natural for us because we’re a small carrier and we cater to small businesses," said Shave. "When you install an integrated voice/computer network, you need a lot of personal attention. It’s something we can do much better than large carriers."

Another form of VoIP is comparable to private branch exchanges in offices that require a customer to buy onsite equipment.

ICG’s Kallet said that by the end of this year, his firm will offer a hybrid product that connects a central office-supplied VoIP with existing PBX systems on a customer’s premises.

Tracking hospital services: Providing telecom and data services to a hospital can be a nightmare to track.

It’s typical for hospitals to get dozens of different phone bills a month to cover service for different departments and at different locations operated by the hospital. Almost invariably the bills include lines that are no longer active.

For years a firm in Oakbrook Terrace, Cimco Communications Inc., has specialized in sorting out telecom services for hospitals and other organizations, providing a single bill and a computerized control system.

Now instead of selling its services to one hospital at a time, Cimco has made a deal with the Metropolitan Chicago Healthcare Council to offer its services to all 140 members of the organization as a preferred provider.

During telecom’s recent meltdown, Cimco has been a bright spot, one of the few local telecom firms that has seen its business grow.

The new hospital deal likely will accelerate that trend.

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