BandTel Sells VoIP Via Gear VAR Channels

BandTel, a two-year-old VoIP company, made its formal introduction to the marketplace in mid-June with the announcement of its second round of funding, which it followed with a stream of news about its channel strategy wherein it has become a carrier partner to large gear makers and will be able to sell through those manufacturers VARs.

BandTel provides VoIP termination to the PSTN for high-volume telecom users such as call centers, teleconferencing companies, IVR users and large enterprises worldwide with dynamic routing over facilities operated by Global Crossing Ltd., XO Communications Inc., Level 3 Communications Inc. and MCI (now Verizon Business). The company relies on its own SIP softswitch technology to provide unique capabilities, such as connection call systems via a trunk-to-trunk transfer, echo cancellation and line monitoring for quality-based routing.

BandTel received a second round of funding of $1.5 million. Seagrove LLC led the Series B investment. BandTel will use the funds to further expand its sales and marketing team, invest in marketing and business development initiatives and support the company’s working capital needs.

Among the companys marketing initiatives is a new distribution strategy. In July the company announced deals with Zultys Technologies and AudioCodes Ltd. to sell through their respective VAR channels. Other vendor alliances are expected to follow.

Chris Dunk, president and CEO of BandTel, explained that, in general, BandTel buys the gear from the VAR and places it at the customer premises free to the customer in exchange for a qualifying service contract. Under the agreement with AudioCodes, for example, BandTel provides the equipment free in exchange for a 100- million-minute-per-month commitment. The VAR still gets its margin on the equipment sale as well as a monthly recurring commission of 5 percent to 8 percent on the traffic generated by the customer.

Dunk said BandTels network already is certified interoperable with the gear (Zultys IP PBXs and AudioCodes gateways), so it offers VARs a turnkey marketing bundle. He said a 90-day escape clause lets the customer opt out of the deal.

While the company expects to work primarily with VARs already part of its vendor partners programs, prospective agents also are eligible and would be referred to a distributor, such as Paracon.