Want to be your own long distance player?

Ted Shelton has a great post about the economics of VOIP. According to Ted it does not take a lot of money to get your own long distance company up and running, say $8k of capital equipment costs not including the variable cost of running T1 lines, etc. If I can now take open source software (Asterisk), off the shelf Lintel boxes, and cheap cards to manage the T1 PR1s to interconnect with the public telephone network, and for $8k upfront be my own phone company, that is a scary proposition. Of course, this is oversimplifying the matter as it does not include the expense of sales, marketing, and customer support. However, this is yet another example of a broader trend, the commoditization of hardware and software. There are no sacred cows here. Even expensive telephone gear and equipment is at the mercy of the open source and Lintel movement.

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This post was written by who has written 361 posts on BeyondVC.

4 Responses to “Want to be your own long distance player?”

  1. Brandon Wirtz Feb 25, 2004 at 10:49 pm #

    Offering the 911 as per the FCC requirement is the tough part. $8k will build you a telco in Europe, but here doing the 911 routing will make that a bit more expensive.

    Some one should set up a service that lets HomeBrew VoIP providers do 911 on the cheap, or at least on the reasonable. But then I’m in the business of selling shovels to gold diggers so I always am looking for a way to capitalize on the guys trying to capitalize on the next big thing.

  2. Ed Sim Feb 26, 2004 at 11:33 pm #

    So true on 911. Here is how ATT is going to handle 911 for its VOIP customers:

    link to internetnews.com

    I am sure this ruins the $8k economics for a Homebrew VOIP provider.

  3. TM Lutas Mar 18, 2004 at 3:39 pm #

    Another consideration might be how big a phone bill do you need to have before it’s cost justified to bring your phone service in-house. You don’t need sales and marketing if you’re the only customer of that phone company and there’s a likely market for a company that can do it ‘out of the box’. Mid to large size firms that have large call center activities might do well to be their own phone company, just as it’s justified for some companies to run their own power and to own their own buildings.

    Ideas, I got a million of ’em.

  4. David Feb 26, 2005 at 8:52 pm #

    Im still not sure how to setup a long distance service. Do you think it is a good buisness to get into?


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