In battle against Goliaths, VoIP startup is cool as ice

A Texas startup is hoping that its voice-packet prioritization products can be the single stone it will take to compete with established VoIP giants like Avaya and Cisco Systems.

IceNet LLC is an infant in the VoIP market, but CEO and telecom industry veteran Bill Stapleton said that his staff

is already "having fun."

Employees of the Richardson, Texas-based startup have a right to enjoy themselves, since the company announced its first customer earlier this month. Since then, customers like Addabrand.com Inc. and Philadelphia-based service provider Solo101 have also signed on.

IceNet provides products like VoiceWorks 32Connect, a Web-based application that prioritizes voice packets on carrier-grade IP backbones. Using a software-based "soft phone" or an analog terminal adapter for common single-line telephones, the application allows users to receive and place calls anywhere in the world.

IceNet was founded in October 2003, when Stapleton and IceNet president Steve Holden combined their 55-plus years of telecom experience to form the company. The VoIP network provider was originally called VNet before it was acquired early last year by the Nexus Group.

Stapleton, who began his career with AT&T in 1961, said that he was interested in IceNet because it offered an opportunity to provide a high quality VoIP product without clipping, latency or echo.

With any startup, however, the inevitable question of sustainability arises, especially when a product or service is paired up against established vendors in the form of Cisco Systems Inc. or Avaya Inc.

"Our network is a heck of a lot more nimble," Stapleton said. "We didn't try to reinvent VoIP; we worked with a number of companies in a vertical market to produce services they need to be competitive in their own markets."

According to Stapleton, IceNet is targeting several markets: mid-range cable companies with a subscriber base between 75,000 and 500,000, broadband VoIP, hardware resellers and a tentative fifth segment involving broadband over power lines. The final segment is tentative, Stapleton said, as it will not become mainstream until well into 2005 or later.

In a time when there is a lot happening around Internet Protocol-based products, IceNet has come onto the scene in a timely manner, said William Stofega, senior research analyst with International Data Corp.'s small business telecommunications program.

Stofega said that IceNet has already broken into the market with products and services, while similar products are still in development at Avaya and Cisco. These larger vendors' offerings are currently based on non-IP products and a Centrex market.

An early notch on IceNet's belt was securing Carrollton, Texas-based Addabrand as a customer. Greg Fausak, president and owner of the VoIP reseller, said that he purchased services from IceNet because the minimum starting costs were less than with more established vendors. He said that IceNet was providing decent rates without the usual 10 million unit minimums. IceNet also provided Fausak with the specific origination and termination products he was looking for, at a lower price per unit.

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"They were willing to help me get started. They were a fairly small player and a lot of the people you talk to -- like the Level 3s -- are all 10 million minimums. We couldn't afford to sign up with something like that," Fausak said.

Stofega said that while IceNet is currently serving customers in the small and medium-sized business market, Framingham, Mass.-based IDC sees a migration to those types of products for the larger enterprise customers.

"One of the attractive areas to service is multilocation sites. This could be a chain of restaurants or banking branches that are spending significant time and money communicating with distant offices," Stofega said. "If they're on the network, then they stand to save substantial amounts of money."

He added that he believes IceNet has a network designed for key metro areas "in the shoot," whereas the big carriers do not, and that this may be what the startup needs to "get a seat at the show."

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