Interlink�a Global Niche
By focusing on international and wholesale VoIP services, Interlink is carving a niche for itself in a highly competitive marketplace.
Kenneth Hosfeld, Interlink's Executive Vice President, says CLEC status will give the company much better pricing on its data infrastructure. "Now we can go to the incumbent, Bell Southwe don't have to go through a third partyand we can negotiate CLEC rates instead of reseller rates," he says. "It cuts costs considerably."
Interlink's main focus, Hosfeld says, is on serving the needs of global corporations that are looking for a VoIP solution. "If you look at the larger providers, what they're going after is the American-based subscriber; they want a mass deployment," he says. "We're doing that, but our primary focus is on corporations that have international presences."
Hosfeld says companies like Vonage aren't able to adjust their offerings to meet the needs of a corporate customer. "They have a standard package, and you take it or leave it," he says. "But corporations have specialized needs. We can attend to those needs, and Vonage can't. They're simply not flexible enough to do it."
Interlink is employing both acquisitions and partnerships to expand its international presence. In May of this year, the company announced the formation of a partnership with CosmoTelco of Athens, Greece. In July, Interlink announced that it had acquired Venezuelan telco NGTV for $6 million, followed last month by the formation of a subsidiary in Ecuador. Today, the company released news of a joint venture with Curacao-based World Wireless Telecom to provide wireless voice and data services to the entire Netherlands Antilles island group.
The company is also working with other small providers to create a global consortium, which Hosfeld says should be announced within the next few weeks. "The reason we're doing that is very simple," he says. "We can start tying our networks together so your customers can call my customers for free, and my customers can call your customers for free."
As a result, Hosfeld says, a comparatively small provider will be able to have a global presence. "It makes us look like a big guy on the block, when we may not be," he says. "And not only are we doing it with VoIP companies, but also with some of the smaller ISP providers in other countriesa lot of them are going wireless with a combination of Wi-Fi and WiMax, and that plays perfectly into this."
Earlier this year, Interlink announced that it had signed an agreement with communications equipment provider Harris Corporation to deliver a wide range of telecommunications services to Harris's offices in Argentina, Mexico, Brazil, Venezuela, and Redwood Shores, California. That contract, Hosfeld says, is a strong validation of Interlink's global VoIP offering.
Still, Hosfeld says Interlink isn't giving up on the U.S. market. "We're going to roll out a multi-level marketing campaign there," he says. "We'll have everything Vonage has, but we're going to turn marketing and sales of it over to a multi-level organization. And the numbers available to us in selling VoIP services in the United States will allow us to do thatwe don't need that big a profit margin to survive."
The company also recently acquired a New Jersey-based wholesale VoIP provider, Assai Inc., which at the time of the purchase was generating wholesale traffic of more than 12,000,000 minutes per month. As a result of the acquisition, the former CEO of Assai, Siba Padhi, joined Interlink as the head of its wholesale division.
Keith Nissen, Senior Analyst at In-Stat, says the wholesale market is an excellent target for a company like Interlink. "Even though your customer base may change over time as a wholesale provider, there are always going to be small carriers out there who need to lease bandwidth on somebody's network," he says. "If you can provide them with connectivity and with a relatively inexpensive way of providing service, then you've got a business for yourself."
Similarly, Nissen says, the international market is a good place for a smaller provider. "The larger carriers need a certain percentage of traffic, of subscribers, to justify their operations and expansion into specific countries," he says. "And so carriers that are smaller and can justify their existence on less subscribers are always going to have a market there."
Latin America, Nissen says, is a particularly strong example of that kind of opportunity. "The growth of IP communication in Latin America is not anywhere near what it is in Europe and in the United States, so consequently, the major carriers simply are not focused on those markets," he says. "And that provides niche opportunities for a lot of these smaller carriers."