Telco in a box

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In a move that could shake up the channel, Universal Telecom has released a product that lets organisations cheaply provide branded telecommunications services.

The company's “Telco in a Box” bundles the infrastructure needed to supply mobile and fixed-line phone services and dial-up and DSL internet access.

The cost of providing these services alone would easily reach over $100,000, according to Universal Telecom's Damian Kay.

A provider would also need significant volumes to make the services feasible or would otherwise pay retail prices on calls.

In contrast the Telco in a Box, which acts as a virtual wholesaler, lets anyone with a computer, telephone and Internet access provide branded telco services for $20,000.

Universal uses its buying power to secure good rates on bandwidth and call costs, which give the reseller room to add their own margin.

Telecommunications services are attractive to resellers because they can provide every facet needed to run a business – from office furniture and computer hardware through to mobile and fixed-line calls, all one the one bill, says Kay.

Universal handle all the back-end logistics including deposits to the carrier and payment houses such as BPay, Australia Post and credit cards, says Kay. A reseller provides the sales and marketing; no operations staff are required, and Universal can provide its own customer support if necessary.

A web-site is also provided, which allows anyone to become a telco in a matter of hours, says Kay. No other infrastructure or provision contracts are necessary, says Kay. “There's just one relationship with [Universal].”

Financing options include paying a $5000 deposit and paying the $15,000 balance on future earnings.

A key advantage is the good pricing Universal secures through high-volume transactions. Payment systems are much cheaper in bulk, and Universal's 15 million minutes of phone usage a month means resellers start from a much lower price point than otherwise.

However the product is available to any organisation interested in buying bulk telco services. Kay says that corporates with $50,000 a month in fixed-line costs could buy the product and make themselves their own customer, reducing the overhead paid to the carrier.

Corporates could also create incoming revenue by providing telco services to their own customers.

Resellers can also expect competition in the space from ISPs looking to add value to internet access provision. But the most promising providers will be associations such as football clubs, which have tens of thousands of members, says Kay.

An AFL club with 30,000 members could offer each member a telephone service under the team brand, says Kay. Apart from the potential for a better phone deal, members would also be supporting their club financially.

“Every time you pick up your phone you are helping your club,” says Kay.

The Telco in a Box came at the behest of AAPT which wanted to expand its customer base without managing each small provider separately. “They don't have to deal with people individually, they just deal with Telco in a Box,” says Kay, who has an exclusive contract with the carrier. “We're basically mopping up the rats and the mice.”

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