Primus prepares for U.S. expansion

Primus Telecommunications (OTCBB: PMUG), a hosted IP-PBX service provider based in McLean, Va., but better known in places like Canada and Australia, is making some noise in its home country, beginning with expansion into the Chicago market. Primus is opening a Chicago office to target small to mid-sized businesses there and plans to spread its wings further in the US.

Heading the Chicago effort is Kevin Weber, now director for US Business Field Sales and Operations for Primus and the man who built the nationwide sales organization for Cbeyond.

“Primus has been very active in the global market -- in fact, we’re the sixth largest VoIP provider in the world,” Weber said in an interview. “We’re the second largest alternative provider in Canada and the third largest in Australia, and we’re also doing lots of business in the UK, Brazil, India and other markets.”

With its own network backbone, Primus has been selling international long-distance and data services including wholesale offerings, which Weber said account for 25% of its sales. What the company lacked in the US was a direct sales force to reach businesses, and that is what Weber was hired to build.

The effort began in Chicago in July, Weber said, with the hiring of the first sales people for Primus. The company’s primary differentiation in the competitive market is that it requires no upfront capital investment for its hosted PBX services, as even the cost of the Polycom and Cisco VoIP phones is amortized over the life of a two-year service contract, Weber said.

“Especially at a time like this, when the economy is down, a lot of businesses are reluctant to make a major investment upfront,” Weber said.

Primus offers quality of service guarantees built into service level agreements, and provides the flexibility of a hosted VoIP solution including flexible moves and changes at no costs.

“One of the real benefits of having an IP-based service is that you can unplug the phone from one IP connection and plug it in elsewhere and it will function as if it’s sitting in the office,” Weber said. “This is a great feature for companies who have employees that travel and also for disaster recovery.”

In the event of any kind of disaster, employees can work from any IP connection as if they were in the office, Weber said. Customers also have the flexibility to add or subtract lines as a business grows or contracts.

The Primus expansion will continue, Weber said, with cities like Dallas, Atlanta, Washington, DC, and Houston on the road map.

“We are going to start city by city and make sure the brand is established,” Weber said.