Goal has always been to be Bought Out
Even 8 years ago, they were talking about working toward a buyout.
"But our overall goal is to build ourselves up to the point where we will be bought out."
Nov 21, 2005, 12:00am EST UPDATED: Nov 17, 2005, 10:47am EST
Local VoIP firm fattening up in order to be eaten
VoX wants to be a top 5 player in Internet phone field.
Chris Kauffmann
Staff Writer
CELEBRATION -- VoX Communications Corp. is in the process of playing Pac-Man -- with a vengeance.
Celebration's year-old Voice over Internet Protocol -- or VoIP, for short -- company is gobbling up as many contracts and partners as fast as it can with the idea of becoming a top five player within the industry next year, right alongside the Vonages and Packet8s of the world.
The ultimate goal is to become so fat and enticing that VoX itself will end up on the dinner plate of a major communications company such as an AT&T or BellSouth.
"It's all about building value, and our immediate goal is to build value for our shareholders and employees," says Mark Richards, VoX's 45-year-old president and chief information officer. "But our overall goal is to build ourselves up to the point where we will be bought out."
VoX, a subsidiary of White Plains, N.Y.-based eLEC Communications Corp. (OTCBB: ELEC), certainly has been rapacious since being formed in October 2004 to provide high-quality wholesale and retail VoIP service. The service allows users to make telephone calls via a broadband Internet connection for less money than regular telephone service.
New clients, markets, partners
In recent months, the company has announced contracts with American Cable Service in Ocala, LTDN NextGenFone Ltd. in Dallas, Texas, Aptela Inc. in McClean, Va., Liberty Bell Telecom of Colorado and Stowe VoIP in Stowe, Vt.
In addition, it has announced VoIP service in metro New York, Atlanta, Washington, D.C., Denver, Orlando, Fort Lauderdale, Boca Raton and West Palm Beach.
Along the way, VoX has enlisted Global Crossing Telecommunications and XO Communications as its two main network partners and UTStarcom Inc. as its hardware partner.
"We have other partners in the works," says Michael Khalilian, VoX's 43-year-old chief technical officer and board member, who is also chairman of the trade group International Packet Communications Consortium and an often- quoted industry expert.
The rapid growth has not come at the expense of quality. Recently, VoX was recognized by Internet Telephony magazine, which awarded it with its 2005 award for best service provider and its 2005 award for most innovative VoIP provider.
Luring, recruiting people
VoX got its start when eLEC lured Richards away last year from Volo Communications Inc. in Orlando, which, along with its parent, Caerus Inc., was bought by Fort Lauderdale-based VoIP Inc. this year.
In turn, Richards recruited Khalilian, who was one of the founders of Volo.
As a traditional telephone service company with customers in four states, eLEC wanted to get in the next generation of communication service and so it sought out Richards to accomplish that goal.
However, Richards and Khalilian decided to turn their initial focus away from eLEC's 20,000 existing retail customers in order to attract new customers nationwide.
"We're interested in going out and getting a new generation of customers because we think it's easier than cramming a new product down the throats of old customers," says Richards, who plans to add 20 employees to his staff of 10 next year.
VoX is not the only local company offering VoIP service.
FDN Communications, Smart City, Orlando Telephone Co. and Cordia Corp. all are either offering VoIP service or have it in the works.
Like major companies, though, these companies' products are a part of a fleet of services they offer, while VoX is concentrating solely on VoIP.
A 'new breed' company
That makes VoX part of what Payam Maveddat calls a "new breed of companies" that include Vonage, Packet8 and Skype, which was recently purchased by eBay.
"They are taking advantage of the ubiquitous broadband access to provide VoIP to their customers," says Maveddat, an industry expert who is the vice president of the wireless switching product line for Tekelec (Nasdaq: TKLC), a North Carolina-based developer of telecommunications products.
An eLEC advisory board member, Maveddat says each company has a different business model, but each has realized that they are not restricted by any geographical boundaries as have been the major players.
"The question becomes how quickly they can partner and expand before the bigger players realize they need to get into it," he says. "Right now, the majors are preoccupied with setting up fiber networks for video in order to compete with cable companies, so they aren't really paying as much attention to voice as they should be."
In a recent interview with Orlando Business Journal, BellSouth spokeswoman Marta Casa-Celaya said the company has found a number of problems with VoIP and it isn't convinced that it is reliable enough for its customers.
"It sounds great, but by the time that has deployed, there may be something better that has a longer shelf life," she said.
Even if VoX doesn't become takeover fodder, Richards hardly believes that will be the end of the world.
The company, Richards says, would look at bundling services like other companies. "I like building startups from zero to hero," he says. "It's all about adding value."
