XO Communications Announces Bandwidth Pricing for Phone Calls

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XO Communications Announces Bandwidth Pricing for Phone Calls

XO CommunicationsXO Communications tomorrow will announce bandwidth-based pricing offering for converged IP services. Instead of paying per minute for voice calls like both traditional TDM and even current VoIP offerings do, XO will be completely bandwidth-based pricing. Considering that voice is simply another application riding over IP, it certainly makes sense, but the premium of charging per-minute rates or per line rates even for VoIP calls is a hard habit to break. It's just too lucrative to the service providers to change their billing practices.

XO Communications certainly changes the way voice should be charged. Whether you go to foxnews.com, cnn.com, or make a VoIP call, you're using the same Internet data pipe (more or less since peering affects how packets are routed). Granted, the last leg needs to connect to the PSTN in most but not all cases  - SIP-to-SIP calling in-network being one exception. PSTN termination does have costs and maintainence associated with it.

Under its new XO IPfolio, XO Communications tomorrow will launch XO IP Flex and the nationwide availability of XO SIP. The new XO IPfolio includes XO IP Flex, XO SIP, XO One iPBX, XO MPLS IP-VPN, and XO IP Flex with VPN. XO espouses gow the XO IPfolio "introduces a unique and simplified pricing concept for businesses to better manage the consolidation of their voice and data networks over a single IP infrastructure."

Customers simply select an IP port speed from 1.5 to 45 Mbps, a calling plan and any additional features. Because voice is just another application on the IP port, customers pay nothing for incremental lines or voice channels provisioned within the port speed they have with their service.

Will XO succeed in this pricing model? Too early to tell, but they have broken the pricing paradigm the way voice is charged and you can expect others to soon follow.

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