Starting a voip business

Byline: Vince Vittore

Lightyear Network Solutions, an 11-year-old Louisville, Ky.-based carrier, will announce this week it is using Sylantro Systems' application platform to deliver enhanced voice-over-IP applications in the residential market. The move is one of the first by a carrier in the consumer market to get beyond simple price competition.

Among the initial applications of the Xstream branded service is a unified messaging solution that is significantly easier to use than previous products, according to Bruce Weidner, senior vice president of corporate development for Lightyear.

"You had a lot of companies out there that shot up and failed trying to get people to purchase unified communications where you have to pick up a phone and dial an 800 number," he said. "Now you pick up your phone and your dial tone has all that. We have the full complement of all the different messaging services, whether it be voice mail and conferencing or the ability to convert voice mail to e-mails."

Lightyear has more than 200,000 customers and generally has been reaching them via UNE-P offerings from RBOCs. The carrier also has a partnership with Level 3 under which it collocates equipment and buys some services from Level 3.

The push into the residential market puts the company's network in the same technical position as retail competitors like Vonage that can use any broadband connection to send VoIP services. However, the move also will let the company compete against independent carriers like Alltel that are exempt from providing unbundled network elements.

"It's going to open up a lot of areas that we couldn't compete in before," Weidner said. "We have been working with the various Bell companies tweaking our UNE-P offerings, but you bring along the Sylantro platform and you can put together a seamless, integrated package pretty quickly."

The Lightyear deal also is significant to Sylantro because it represents the initial entry of the vendor into residential voice services.

"We started out historically in PBX replacement, which we think is the most sophisticated area," said Bernard Gutnick, vice president of product marketing at Sylantro. "We view this as a natural progression. The core tech foundation has been designed to allow features to be packaged together depending on the particular market."

And though the VoIP service market has developed slightly differently in the consumer and business sectors, the requirements are starting to converge as it moves into more of a mass market product. Early VoIP adopters, for example, were more tolerant of best-effort service because of the cost benefit they were getting. Traditional telco customers, though, will expect VoIP service to be just as reliable as the dial tone they are receiving for their local carrier, Gutnick said.

At the same time, though, Vonage has done a lot of the groundwork in familiarizing consumers with various forms of VoIP, he added.

"Vonage and many others have been very successful in making consumers aware of this voice over various forms of broadband technology," Gutnick said. "There's a perception that cost is everything, but there will be differences between service providers."

Lightyear is also hoping to target the mass market by offering virtual phone numbers, whereby customers can choose their area code and be only be charged local rates for making calls into and out of that same area code.

"I in live Louisville but my entire family is in Cleveland, and this is exactly the type of service I'd want," Weidner said.

Within the next year or so, Lightyear plans to expand the virtual number service internationally, letting customers choose their own country codes.