ICG Netcom stays close to home

ICG Netcom last week announced its first markets for phone-to-phone Internet protocol voice service. Unlike many other early market entries, though, the company is not chasing international toll arbitrage opportunities but giving the biggest breaks to local toll callers.

Under the initial calling plan, users in 31 California, Colorado and Ohio cities will pay 5.9cents a minute if their calls can be terminated through gateways connected to ICG's network. Calls that terminate outside the network cost 8.9cents a minute.

"The primary focus of the first phase of the rollout is to cross-sell," said David Gandini, president of long-distance for ICG.

ICG's initial marketing thrust focuses on its 500,000 Internet customers. To sign up, users must have Internet access and register their phone or fax numbers. In the first phase, the company intentionally set up the system to avoid a retail model, said Gandini. Instead, the company is concentrating on leveraging ICG's network. "The most effective rollout was to use our network where we have control," he said.

Indeed, keeping traffic on your own network avoids local access charges from incumbent telcos and is the second phase of IP telephony opportunities, said Carl Boeing, data services analyst for Atlantic ACM. "The second phase is exploiting efficiencies afforded carriers through the use of IP as a transport mechanism," he said.

Giving users a less-expensive, in-state long-distance option also lets the company carve its own niche. "If you look at the intrastate charges, it does seem like there's more of a window there, said Carl Duffy, an analyst with Killen & Associates.

In a separate announcement, ICG Netcom said it would begin marketing digital subscriber line services to its customers nationwide.

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