A telecommunications service provider based in Sydney is looking to breathe new life into the value-end of the Australian telco market with a suite of services called Telco in a Box.
Pitched at existing telco resellers, Internet service providers (ISPs), corporate customers and social clubs, Telco in a Box offers franchisees managed infrastructure including customer billing, payment services, reporting and call rates. Other features of the service include a fully operational website and an MYOB accounting package.
It costs $60,000 to be set up, including infrastructure, ongoing training and business support. Telco in a Box managing director, Damian Kay, estimated that setting up a telco from scratch would involve an initial outlay of more than $150,000 with additional ongoing costs.
Telco in a Box start-ups receive tier-one call pricing but come down to tier-two upon reaching $200,000 per month in end customer use and tier-three when passing $400,000. Resellers passing $600,000 can negotiate even lower costs.
“We still don’t have commoditised pricing [in the Australian telecommunications industry] after seven years of deregulation,” Kay said.
“This solution opens the door for anyone with a PC, phone and Internet access to become a virtual telco without the hassle of running their own infrastructure or billing services.
“It is a good way for existing telco resellers to get better pricing or ISPs to add additional revenue streams.
“They set their own margins and pricing before concentrating on signing up customers and building their own brands while we take care of the heavy lifting.
“The challenge for us is not putting them on the network — it’s helping them to build their businesses.”
Kay estimated resellers would make margins of 20-25 per cent on SME customers or 30-35 per cent on residential customers.
He hoped to appoint 200 resellers within the next 2-3 years, estimating a fairly even split between resellers and ISPs on one hand and corporate customers or social clubs running their own telephone systems on the other.
“It makes a lot of sense for corporates to do it,” Kay said. “They get access to their fixed-wire telephony at wholesale price and effectively create a new asset on the balance sheet. We manage the accounts and customer service while they pick up the profit every month.
“Call centres are a classic example because it gives them the opportunity to make money out of their own calls.”
Telco in a Box telephony services are delivered through AAPT and RSL Com networks. Internet is sourced through AAPT subsidiary Connect.
Six franchisees have been operating a pilot scheme since March and billing customers for the past three months. Kay said he was at various stages of discussion with 24 other interested parties.