BandTel partners with IP PBX manufacturers to provide ISPs with a turnkey VoIP solution for business customers.

by Jeff Goldman [August 29, 2007]

Newport Beach, Calif.-based BandTel was founded in 2004 by three people: its CEO Chris Dunk, CTO Peter Sandstrom, and CFO Rick Edwards. As Dunk puts it, the trio's aim in creating BandTel was pretty straightforward. "We thought, 'Voice over IP is an emerging technology—let's get in it and do the best we can,'" he says.

Dunk says BandTel's key strength lies in the fact that the company has done extensive interoperability testing with a wide range of IP PBX manufacturers in order to offer turnkey VoIP services in partnership with them. "And we're specifically going after the ISP space, providing them with an SMB solution with BandTel as the default phone company," he says.

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The partnerships with the manufacturers, Sandstrom says, give those manufacturers an opportunity to make money on more than just their hardware by working with BandTel on the service offering and providing level one support. "So at the end of the month, they get a check cut to them not only for widgets installed but also for services rendered," he says. "It's a radically different business model, and I think it very possibly could be the way the future goes."

BandTel's size, Dunk says, is what allows it to explore non-traditional relationships like these. "Historically, if Avaya sells a PBX, they're not looking to AT&T and Qwest and whoever else for monthly revenue—it's never happened," he says. "We're a relatively small, nimble company, and we're willing for everybody to participate in this thing. We're all going to go down the path together."

A business proposition
For an ISP, Dunk says, the value proposition is simple. "BandTel does all the work—we bring the partnerships, in terms of the SMB offering from XYZ IP PBX… and then they go out into the marketplace," he says. "BandTel provides all the billing, the ISP provides all their marketing heft in their given locale—and they're in the SIP trunking business."

Dunk says the company will work with ISPs of any size, as long as they're targeting business users. "The only question becomes, do they want to private label us, or do they just want to partner with us—and everybody looks at it a little bit differently," he says.

You'd expect small companies to want to resell and large companies to want to white label, but it doesn't always work that way. "We've had some folks that are a little bit smaller that want to private label us, and we've had some folks that are bigger that just want to do some joint marketing with us."

The company does not target residential users. "If you look at the marketplace, you'll see that Vonage is slowly going out of business and SunRocket just erupted," Dunk says. "Maybe that market is fine for some people that are smarter than us—but we're not going to play in that space."

Another key differentiator for the company, Sandstrom says, is its N-Plus architecture, which essentially results in the ability to deploy as many SIP proxies as are needed for a given task. "We decouple the switch from the end device, so the end device can talk to many of our switches," he says.

Reliable and flexible
The result, according to the company, is five nines of reliability—Sandstrom says BandTel hasn't been down once since the company instituted this architecture over two years ago. "A switch could go down, and instantly your call would be going to one of our others switches dynamically," he says. "With the other folks in this space, you're pretty hardwired to a switch—if it goes down, you're down with it."

Pricing can be offered using one of three different models. The most popular, Dunk says, works like a cell phone plan—the user buys a bucket of minutes for the entire office, and they're done. "For the SMB space, we think this is a no-brainer," he says. "Everybody's obviously very well entrenched in how they pay their cell phone folks—it seems to work nicely—and we're heading down the same path."

Alternatively, customers can pay a flat fee per month per SIP trunk, plus usage—or they can simply pay a higher monthly fee for an all-you-can-eat plan. "We have a number of customers that already do that with us," Dunk says.

Ultimately, Dunk says the aim of BandTel's offering is to help ISPs focus on what they do best. "It's all sales and marketing for them," he says. "The technology is very straightforward—if they can bring IP pipes to the business locale, then we'll bring the partnerships… and they can basically get into the trunking business overnight."

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