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January 17, 2008

XO Communications Announces VoIP Offerings and New Pricing Model

By Shamila Janakiraman, TMCnet Contributing Editor

XO Communications (News - Alert) has announced the expansion of its VoIP offerings and a new pricing model for small and medium businesses. The pricing will be based on the bandwidth a business uses for VoIP services and not on the number of lines.

XO said in a press release that its VoIP offerings and the pricing policy would enable charging of U.S. business customers based on the IP port speed ranging from 1.5 Mbps to 45 Mbps with additional costs for long-distance calling plans and other extra features.

Nic Jackson, director of voice and converged services for XO commented, “With IP, voice is just another application over the IP backbone. When we put a T1 (connection) out to the customer premise, it really doesn’t matter to us, or to the customer really, how they use that T1, as long as they have enough bandwidth to manage their voice and data needs. Why would we price differently for a voice channel vs. a data channel? It just doesn’t make sense in this new IP world.”

Jackson also noted that charges would depend on location and would be based on a 3 year contract.

Lisa Pierce, an analyst with Forrester Research (News - Alert), added, “The new pricing model could cut costs for companies, particularly small and medium-size businesses. For a T1 line, a business with volume of about 54 calls per hour would be necessary for the XO pricing to make sense.”

She further noted appreciation and advised businesses who were interested in going for the plan to find out if the service is offered on XO’s own backbone or if the carrier is buying access from other companies. She warned that sometimes outages do occur in rented network access.

Pierce pointed out that businesses should plan out their current and future voice use before entering a bandwidth based contract.

“They need to really have a handle on their traffic to do that. And a lot of companies don’t,” she added.

Along with this, XO also announced the launch of two VoIP offerings. The XO IP Flex service, which allows customers to use traditional PBXes or multiline key telephone systems to connect to XO’s VoIP services.
This new service allows unlimited site-to-site calling, voicemail, and dynamic bandwidth allocation, with full use of the IP circuit for data when voice lines are idle. XO’s XOptions Flex, the older service offered 3Mbps bandwidth while the new IP Flex offers bandwidth of up to 10Mbps said Jackson.
XO also announced the nationwide availability of its IP SIP VoIP service. Businesses with IP PBX (News - Alert) systems can avail XO’s IP SIP VoIP service which delivers voice and data services over a single connection.
Shamila Janakiraman is a contributing editor for TMCnet. To see more of her articles, please visit her columnist page.

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