Taking the VoIP Plunge continued

Another approach
RMI.net of Denver, formerly Rocky Mountain Internet, has already had success with VoIP, but it is pursuing a quite different strategy.

The company has been offering VoIP long distance services—7 cents a minute anywhere in the U.S.—for over a year, building a core of about 1,000 customers who buy packages of minutes on a regular basis.

But RMI doesn't send calls out over the public Net. It keeps them on its Internet backbone network as far as it goes and then passes them off to long distance carriers with which it has negotiated volume discounts.

The company is expanding its backbone network from bases in Denver and Colorado Springs and hopes eventually to have a national network that will carry VoIP traffic.

RMI nixed the idea of using the public Internet because it knew it couldn't provide the quality of service required by target small and medium-size business customers. In fact, though, most of RMI's VoIP customers are consumers.

The business is profitable, says VP of telecom operations Becky Watson. "But if that was the only thing we did, it wouldn't be a very good business."

Just one component
It's not the only thing. RMI is positioning itself as a broad-based communications service provider. Since offering VoIP service, it has added traditional telecom services such as 800- and long distance. Now it's applying to become a CLEC (competitive local exchange carrier).

Watson insists VoIP is a good business for local/regional ISPs to get into, and fairly easy to get into too—although beware the cultural differences between the Internet and telecom worlds, she warns.

But clearly RMI is a different class of company from the average local/regional ISP—with deeper pockets, and bigger aspirations. So can World Presence and RMI tell us anything about the viability of the VoIP business opportunity?

Well, it seems clear nobody's going to get rich at it in the short term.

But as a way to differentiate your ISP in an increasingly tight market, and as part of a larger telecom strategy, it might make sense if you're committed and have some telecom expertise.

On the other hand, some ISPs sense VoIP is a little too good—or at least easy—to be true. For one thing, regulators could still spoil the party.

If you're an ISP who has looked at the opportunity and said 'Nah,' drop us a line, tell us why.

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