XO shakes up pricing models

CLEC XO moves to bandwidth-based pricing

XO Communications continued its aggressive assault on the competitive services market today with a new pricing strategy that lets customers pay strictly for bandwidth and not for a specific number of access lines.

In addition, XO announced expansions to its service portfolio including higher bandwidth options for its XO IP Flex converged services product and national availability of its XO SIP product for native SIP interfaces to an IP PBX.

But it’s the pricing change that XO is hoping will open doors to larger enterprise customers by eliminating the per-line charge they face and allowing them to buy the bandwidth they need for one simple price. XO has been targeted enterprises, in addition to its wholesale and SMB market spaces since last fall.

“It became apparent in early 2007 that lines don’t matter anymore,” said Nic Jackson, director of IP and converged services product management for XO. “Most providers charge incrementally for each additional voice line. In the world of IP, that seems rather antiquated to us. This pricing will look a whole lot more attractive the larger a customer gets. That philosophy will be important as we move into enterprise and compete there. We want to make sure we are competitive.”

The additions to what XO terms its “IPfolio” include speed options of 4.5 Megabits per second and 10 Mb/s for its XO IP Flex product. The 10 Mb/s option leverages XO’s fiber network and its Ethernet-over-copper and Ethernet-over-serial-T-1-technology deployments, Jackson said.

“These are converged services for customers who want to preserve and extend the investment they have made in existing systems, either PBXs or key systems,” Jackson explained. “We think we have a unique position in the space in offering those speeds. It was done in response to demand from customers whose data needs are growing.”

The XO SIP product is also a converged voice and data solution, but it provides native SIP access to the growing number of IP PBXs that are deployed. The product was available in limited markets but is now available nationally and includes a DS-3 speed as well. XO currently supports IP PBXs from Cisco Systems, Avaya, and Digium with more to come, Jackson said.