Conference call price erosion takes its last step: Now calls are free!


News Article: Telespan, July 17, 2002
“Conference call price erosion takes its last step: Now calls are free!,” by Elliot M. Gold Ever hear of Integrated Data Concepts, Inc or TeleConnection.com? As we said in the sixties "read on!" Actually it was "write on!" -or was it Right On!? Just as we thought we had bottomed out in our prices this summer, with automated voice conference calls being quoted at $.09 a minute and below, a company comes along and offers ad hoc reservationless calls, or Web-reserved calls, for nada, zip, zero, at $0.0 a minute. No strings, no "zero interest this year next year or ever," no "nothing to pay until 2000-ever." It's not a promotion, folks. There's a company out there now giving it away for free. And, with virtually no publicity, it's got 10,000 registered accounts (and scads more customers), who are churning through three million minutes a month of free, clear, easy-to-use conference calls. I tried it myself-took me 90 seconds to get an account, and another 60 seconds to launch a three-way call. It took me that long, because I couldn't think of a PIN to give out to the other two callers. Integrated Data Concepts, Inc. (IDC) last night officially launched TeleConnection.com boasting "Free & Simple Telephone Conference Call Solutions for Businesses, Organizations and Individuals... Web-Scheduled Conference Calls or Reservationless Conference Calls." IDC's Web-scheduled service allows you to pre-arrange a call for up to 32 callers, assign a unique secure PIN to the call, send out e-mails to invite callers, e-mails that can in turn populate their Microsoft, Lotus, or other calendar software to remind them to call into a pre-arranged toll-bearing phone number (remember I said that). For the reservationless service, you can do the same, but for up to 96 locations. Call lengths are virtually unlimited. And if you want security, as a call moderator you can register for and receive a unique second PIN, which gives you a dozen more security options such as locking the call, playing a chime when callers come in or go out of the call, reporting the number of persons on the call, muting, and more. "Okay, ol' Crystal Bald," you say, "cute, but 1) there's got to be a catch, 2) this has to be some start-up company making it up as a promotion, 3) they have to pay for their infrastructure, bridges and T1s, and 4) where are they getting the equipment from anyway?... I never heard of them." First-there is no catch IDC has been testing the service since September 2001, and been offering it since the winter. The service grew from 576 accounts and 140,000 minutes of use in September last year to 3,700 accounts and 1.2 million minutes of use in February to 10,000 accounts and 3.0 million minutes a month in June. It's always been free. I've known about the service for three months now, but agreed not to disclose it until IDC was ready. Maybe some of your customers knew about it too, and have been testing it, too. Second-IDC is not a start-up, it's been around since 1985 IDC was founded by Warren Jason 17 years ago to manufacture telephone gear, in particular boxes that provided interactive voice response (IVR) systems, voicemail, entertainment (open forum and voice chat services) and consumer and business conferencing to others. The company is privately held, has no debt, no venture capital or outside investors. Third-IDC doesn't have to pay for infrastructure Warren explained. "We have an existing telecommunications infrastructure that's in place and developed over the past 15 years. That keeps our costs extraordinarily low, and we use excess capacity from this telecommunications infrastructure to service the business and consumer conference calls." The infrastructure Warren is talking about is built around IVR systems he's sold and installed around the world, which are used by others for "telco related voicemail and other interactive telephony applications." The IVR systems are IDC's bridges. In the United States, IDC has them in Baltimore, Boston, Buffalo, Los Angeles, Miami, Philadelphia, Rochester, San Francisco, San Jose and Oakland, Orlando, Utah, and Washington DC. Outside the US, IDC has bridges in the UK, Germany, and three Caribbean countries. Fourth-IDC makes and sells its own bridges IDC has 5,000 of its own ports deployed around the world for conference calls, built on bridges it made itself. The bridge, really the IDC9240 Interactive Voice Response System, sells for $168,000 for 240 ports, or about $700 per port. "And it's made right here in Hollywood!" said Warren. He claims to have sold "hundreds of them." Warren's worldwide staff? Six people. What's next for IDC? International expansion and Web conferencing Warren told me that IDC routinely gets feedback from users of the service in Australia and in Brazil, where they often complain that the high cost of conference calls there drives them to use low-cost long distance to call IDC's bridges in the US for free conference calls. As such, IDC is in talks right now to expand into Asia and Latin America. As for the world going to Web conferencing (so they say), Warren told me that IDC is actively seeking to acquire "a rudimentary web document presentation tool to offer free with our services. We are talking to a half dozen companies about that." Here's what I think It's a scary prospect for the industry if IDC is right. Right now, we're generating $2 billion in services revenue from voice conferencing alone. Statistically, IDC has a heck of a way to go to erode that business. Yes, it's up to 3 million minutes a month or 9 million a quarter, but during the first quarter this year, by comparison, ACT did 35 million minutes, Genesys did 266 million minutes, Latitude hosted 74 million minutes of the 345 million minutes its customers put through its MeetingPlace servers, Premiere Conferencing did 319 million minutes, and Raindance did 112 million minutes, just to put the 9 million in perspective. Here's what he thinks Warren and I talked about a lot of things I was seeing in the last couple of weeks in the industry, the layoffs at Worldcom Conferencing, the company's anticipated bankruptcy, the soon-to-be-announced auction of Global Crossing Conferencing, and several videoconferencing companies announcing that they "would not meet analyst expectations." I asked Warren if he had anything to say to the industry, knowing that. "This has rung the alarm. Conference call service providers can no longer sustain profitability by positioning conferencing as high perceived value, high-touch and high ticket. "Teleconferencing is successfully becoming a commodity with self-service sign-up, scheduling and fulfillment right on the Web. Now that much more complex telecom offerings, such as cellular phone service, and even handsets, are widely marketed and sold entirely on the Internet, conference call providers can no longer compete successfully without cutting overhead, simplifying delivery mechanisms and pricing for volume instead of prestige. "For years now, even the RBOCs have been selling and provisioning enhanced services, such as three-way calling, call forwarding and call waiting via touch-tone interactive systems. It's time for the conference call industry to recognize that the future is now and that market share will be won by companies like IDC who are 'delivering the goods' quickly, professionally and inexpensively." Don't agree with him? Try out his service, and then decide. --------------------- Reprinted from the July 17, 2002 issue of Elliot Gold's Electronic TeleSpan, with permission. TeleSpan is published as an electronic bulletin 40 times a year for $377 prepaid. TeleSpan will license the right to make copies upon request. For subscriptions, contact TeleSpan at +1-626/797-5482, or email us (info@telespan.com), or visit our website: http://www.telespan.com ---------------------

News Article: Telespan, July 17, 2002

“Conference call price erosion takes its last step: Now calls are free!,” by Elliot M. Gold

Ever hear of Integrated Data Concepts, Inc or TeleConnection.com? As we said in the sixties "read on!"

Actually it was "write on!" -or was it Right On!?

Just as we thought we had bottomed out in our prices this summer, with automated voice conference calls being quoted at $.09 a minute and below, a company comes along and offers ad hoc reservationless calls, or Web-reserved calls, for nada, zip, zero, at $0.0 a minute. No strings, no "zero interest this year next year or ever," no "nothing to pay until 2000-ever."

It's not a promotion, folks. There's a company out there now giving it away for free.

And, with virtually no publicity, it's got 10,000 registered accounts (and scads more customers), who are churning through three million minutes a month of free, clear, easy-to-use conference calls.

I tried it myself-took me 90 seconds to get an account, and another 60 seconds to launch a three-way call.

It took me that long, because I couldn't think of a PIN to give out to the other two callers.

Integrated Data Concepts, Inc. (IDC) last night officially launched TeleConnection.com boasting "Free & Simple Telephone Conference Call Solutions for Businesses, Organizations and Individuals... Web-Scheduled Conference Calls or Reservationless Conference Calls."

IDC's Web-scheduled service allows you to pre-arrange a call for up to 32 callers, assign a unique secure PIN to the call, send out e-mails to invite callers, e-mails that can in turn populate their Microsoft, Lotus, or other calendar software to remind them to call into a pre-arranged toll-bearing phone number (remember I said that). For the reservationless service, you can do the same, but for up to 96 locations. Call lengths are virtually unlimited.

And if you want security, as a call moderator you can register for and receive a unique second PIN, which gives you a dozen more security options such as locking the call, playing a chime when callers come in or go out of the call, reporting the number of persons on the call, muting, and more.

"Okay, ol' Crystal Bald," you say, "cute, but 1) there's got to be a catch, 2) this has to be some start-up company making it up as a promotion, 3) they have to pay for their infrastructure, bridges and T1s, and 4) where are they getting the equipment from anyway?... I never heard of them."

First-there is no catch

IDC has been testing the service since September 2001, and been offering it since the winter. The service grew from 576 accounts and 140,000 minutes of use in September last year to 3,700 accounts and 1.2 million minutes of use in February to 10,000 accounts and 3.0 million minutes a month in June. It's always been free.

I've known about the service for three months now, but agreed not to disclose it until IDC was ready. Maybe some of your customers knew about it too, and have been testing it, too.

Second-IDC is not a start-up, it's been around since 1985

IDC was founded by Warren Jason 17 years ago to manufacture telephone gear, in particular boxes that provided interactive voice response (IVR) systems, voicemail, entertainment (open forum and voice chat services) and consumer and business conferencing to others. The company is privately held, has no debt, no venture capital or outside investors.

Third-IDC doesn't have to pay for infrastructure

Warren explained. "We have an existing telecommunications infrastructure that's in place and developed over the past 15 years.

That keeps our costs extraordinarily low, and we use excess capacity from this telecommunications infrastructure to service the business and consumer conference calls." The infrastructure Warren is talking about is built around IVR systems he's sold and installed around the world, which are used by others for "telco related voicemail and other interactive telephony applications."

The IVR systems are IDC's bridges. In the United States, IDC has them in Baltimore, Boston, Buffalo, Los Angeles, Miami, Philadelphia, Rochester, San Francisco, San Jose and Oakland, Orlando, Utah, and Washington DC. Outside the US, IDC has bridges in the UK, Germany, and three Caribbean countries.

Fourth-IDC makes and sells its own bridges

IDC has 5,000 of its own ports deployed around the world for conference calls, built on bridges it made itself. The bridge, really the IDC9240 Interactive Voice Response System, sells for $168,000 for 240 ports, or about $700 per port. "And it's made right here in Hollywood!" said Warren. He claims to have sold "hundreds of them."

Warren's worldwide staff? Six people.

What's next for IDC? International expansion and Web conferencing

Warren told me that IDC routinely gets feedback from users of the service in Australia and in Brazil, where they often complain that the high cost of conference calls there drives them to use low-cost long distance to call IDC's bridges in the US for free conference calls. As such, IDC is in talks right now to expand into Asia and Latin America.

As for the world going to Web conferencing (so they say), Warren told me that IDC is actively seeking to acquire "a rudimentary web document presentation tool to offer free with our services. We are talking to a half dozen companies about that."

Here's what I think

It's a scary prospect for the industry if IDC is right. Right now, we're generating $2 billion in services revenue from voice conferencing alone. Statistically, IDC has a heck of a way to go to erode that business. Yes, it's up to 3 million minutes a month or 9 million a quarter, but during the first quarter this year, by comparison, ACT did 35 million minutes, Genesys did 266 million minutes, Latitude hosted 74 million minutes of the 345 million minutes its customers put through its MeetingPlace servers, Premiere Conferencing did 319 million minutes, and Raindance did 112 million minutes, just to put the 9 million in perspective.

Here's what he thinks

Warren and I talked about a lot of things I was seeing in the last couple of weeks in the industry, the layoffs at Worldcom Conferencing, the company's anticipated bankruptcy, the soon-to-be-announced auction of Global Crossing Conferencing, and several videoconferencing companies announcing that they "would not meet analyst expectations."

I asked Warren if he had anything to say to the industry, knowing that.

"This has rung the alarm. Conference call service providers can no longer sustain profitability by positioning conferencing as high perceived value, high-touch and high ticket.

"Teleconferencing is successfully becoming a commodity with self-service sign-up, scheduling and fulfillment right on the Web. Now that much more complex telecom offerings, such as cellular phone service, and even handsets, are widely marketed and sold entirely on the Internet, conference call providers can no longer compete successfully without cutting overhead, simplifying delivery mechanisms and pricing for volume instead of prestige.

"For years now, even the RBOCs have been selling and provisioning enhanced services, such as three-way calling, call forwarding and call waiting via touch-tone interactive systems. It's time for the conference call industry to recognize that the future is now and that market share will be won by companies like IDC who are 'delivering the goods' quickly, professionally and inexpensively."

Don't agree with him? Try out his service, and then decide.

---------------------

Reprinted from the July 17, 2002 issue of Elliot Gold's Electronic TeleSpan, with permission.

TeleSpan is published as an electronic bulletin 40 times a year for $377 prepaid. TeleSpan will license the right to make copies upon request. For subscriptions, contact TeleSpan at +1-626/797-5482, or email us (info@telespan.com), or visit our website: http://www.telespan.com

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