Net2Phone Calls Caribbean Telco

By Ron Miller

Voice over IP (VoIP) pioneer Net2Phone on Monday announced an exclusive two-year deal with Telecommunications Services of Trinidad and Tobago (TSTT) to provide VoIP services in previously underserved markets.

“This partnership is about going after the underserved market who are unable to afford to make international calls today, and so we designed a suite of services that would really attract them and bring new minutes into the system,” said Bryan Wiener, president of Net2Phone Global Services.

Under the two-year exclusive agreement, Net2Phone will work in conjunction with TSTT to deliver VoIP calling cards, prefix dialing services, (similar to 10-10 services in the US), and Internet telephony call shop services, where Net2Phone helps Internet Cafes set up VoIP phone banks.

“We are very enthusiastic about empowering our customers island-wide with calling services supported by Net2Phone’s VoIP technology. We are particularly excited about the Net2Phone powered calling cards, enabling consumers around the country to place inexpensive calls using any of TSTT’s 2600-plus public payphones,” said Samuel Martin, CEO of TSTT.

Still, Jeff Kagan, an independent telecommunications analyst based in Atlanta wondered why TSTT didn’t undertake the project internally. “I’m surprised they’re not doing it on their own. It’s not brain surgery. It’s something that all major telecommunications providers are moving towards offering in-house.”

“If you’re talking about running a carrier-grade VoIP service with high quality and reliability with global termination at tremendous scale, it’s quite complex. TSTT is relying on our back-office systems that have been tested and proven over an eight-year period – not the kind of battle-tested technology they wanted to do themselves,” Sarah Hofstetter, a spokesperson for Net2Phone said.

Hofstetter admitted, however, that it was an unusual deal because it involved a partnership with an internal monopoly. “For the most part when VoIP providers go into a new country or a new market, they are usually competing with the incumbent phone company.”

“Telcos like TSTT are now looking at Net2Phone as an enabler for retail VoIP services instead of a competitive threat in their markets,” Weiner added.

The deal is part of Net2Phone’s overall global implementation strategy known as the Global Services’ hosted platform. “For the most part, the international market is much more ripe for profit. The U.S. market is so hyper-competitive without considerable scale and bulk, it’s tough to survive,” Hofstetter said.

Analyst Jeff Kagan agreed that there is a huge opportunity internationally. “In the VoIP world, it doesn’t cost any more to send a call across street than across the world. The economic model of business is totally different from traditional telephone business. You don’t have to worry about international access lines, taxes or access fees, (although that’s likely to change over time),” Kagan said.

Net2Phone and TSTT are working together to develop a calling card that can be used in Trinidad and Tobago as well as the U.S., U.K. and Canada, allowing friends and family to share one account to make calls to and from their respective countries with cost depending on the point of origin.

Hofstetter says it currently costs approximately three dollars in local currency to call the United States. With the introduction of the Net2Phone service, that price will drop to $1.09 per minute. While Hofstetter admits this is still quite high by U.S. standards, she says the price is likely to drop over time as Trinidad and Tobago invite competition into the market over the next year or so.

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