VERIZON COMES TO CHICAGO WITH HOSTED IP PBX SERVICES

While hardly tossing caution to the wind, Verizon Communications is advancing the IP PBX cause this summer with a commercial launch in Chicago. Working with GoBeam, Verizon will target businesses with 20 to 200 phone sets and existing broadband connections.

The decision to start outside its own franchise territory is by design. The Bell company is confident in the technology but wants to move cautiously, said Laura Thompson, vice president of corporate marketing for Sylantro, which provides GoBeam's underlying IP platform.

“All the RBOCs are cautious about any news these days,” she said. “They're taking on an area which has pretty stiff competition and represents a lucrative market.”

Verizon is the first RBOC to commit to a commercial deployment of pure IP-based voice services. “We've been on an accelerated path to get this service launched in Chicago,” said David Sherman, senior marketing manager for Verizon Retail Markets, which is working closely with Verizon counterparts in the carrier's franchise markets.

That could include an expanded partnership with GoBeam. However, according to Sherman, Verizon has yet to decide if it will develop IP PBX services in house or farm out most of the work.

Either way, the company is confident it can deliver commercial IP services. Its immediate target will be businesses with existing PBXs that need to upgrade or replace that infrastructure. The RBOC likely will approach the market with a pricing-based approach, given that an IP PBX is about 20% to 30% of the cost of a traditional PBX, said Jeff Stern, GoBeam's executive vice president and co-founder.

Customers such as travel agencies, real estate agents, law firms, accounting firms and small specialty manufacturers like the rich features that IP PBXs offer, including the ability to redirect calls, schedule meetings, share documents and perform directory look-ups, Stern said. While most features can be accessed from a PC, Verizon's service will primarily target telephones.

Pricing will become an even greater play because Verizon and GoBeam are offering a hosted service, Thompson said. For instance, small businesses may want to move the advantages of on-net telephony, but they don't want to pay the entry price for such services.

GoBeam's network operations center is the heart of the initiative. GoBeam and Verizon are co-branding services with GoBeam handling infrastructure, billing and customer support. “This is the first one that is offering this service commercially, and it's a true IP service,” Thompson said. “There are other RBOCs doing things that are trials, but this is a live service.”

There was another reason to choose Chicago as well.

“We have some public utility commission commitments there,” Sherman said. “When they allowed GTE and Bell Atlantic to merge, they wanted to have increasing competition. We said, ‘We'll sign up for that and provide some competition.’”