Telecom On the Cheap

FRAMINGHAM (03/06/2000) - Ever hear of a company called Sosinc (Sensible Office Solutions Inc.)? I hadn't either, nor will we likely hear too much more about it because it came out gunning for our enterprise market but has since washed its hands of it.

Then why do we care? Because its story tells something about voice-over-IP advances and WAN service pricing, both of which are near and dear to our hearts.

Sosinc is building a national voice-over-IP network using AT&T facilities and proprietary access gear of its own design. The company (www.sosinet.com) has boxes in 105 LATAs today, is currently installing 40 more, and hopes to be in all 192 LATAs by June.

Founder and Chief Technology Officer Bob Townsend says the original plan was to use this infrastructure to offer midsize companies low cost telecom services, but before he knew it other carriers and prepaid calling card companies bought out his capacity. His smallest contract to date is for 20 million minutes per month.

Although he won't name names, Townsend says his customer roster includes top-shelf long-distance carriers. The reason they buy from him: They can't carry the traffic as cheaply.

Sosinc can squeeze about 210 calls into a T-1 using its proprietary boxes, which essentially take in dial tone and spit out VoIP. The devices use Layer 2 routing, although Townsend will only go into the details if you sign a nondisclosure form. (I have. I'm waiting for a white paper.)The end result is a network that enables Townsend to sell voice for between 1 and 6 cents per minute, depending on traffic volume. His on-net interoffice rate, say between New York and Los Angeles, is seven-tenths of a cent per minute.

Townsend says companies such as Amoco are getting voice for 4.5 cents per minute through AT&T Tariff 12 deals, but that is an on-net rate and doesn't include any switching. If you take all the bills and divide the total by the minutes used, it usually comes out to about 10 cents per minute.

None of the traditional carriers seem to be able to get below 5 cents per minute, Townsend says. That's why they are turning to him.

While Sosinc is content being a carrier's carrier, the company's tale makes it clear that VoIP is real and here to stay. It can't be long before the traditional carriers are knocking on your door with similar offerings.

- John Dix

Editor in Chief

jdix@nww.com.

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