Tenative Reseller Pricing

[GigeWeb]

I have a question, how are we going to be able to compete with you if your offering unlimited minutes for $15/mo + free adapter when we'll be charged 1 cent per minute plus what ever the adapter rental fee costs?

[VOIPoTim]

I have a question, how are we going to be able to compete with you if your offering unlimited minutes for $15/mo + free adapter when we'll be charged 1 cent per minute plus what ever the adapter rental fee costs?

It's all overselling just like in hosting. The average user on an unlimited plan uses about 470 minutes per month.

Here is how it would break down:


So as an example, the average residential user uses about 470 minutes per month, so your costs would look like this if user has average usage:

Phone Number - $1
470 Minutes - $4.70
USF (8.4% x $4.70) = $0.395
E911 - $1
----
Your Cost: $7.06

If you matched our pricing of $15, you would be making $7.94 in profit on an average user. If you matched Vonage which has over 2 million customers at $24.95, you'd make $17.89 profit on that single user.

The usage of your users will be higher or lower, but the industry average is in the 400s. If you target businesses, they'll have higher usage. If you target home users, most use their cell phones mainly and rarely use a landline.

In telecom, everyone pays per minute. The simple way to explain is is that whatever providers owns the physical equipment that services the phone number gets paid per minute for all calls that go into that number from the provider completing the call.

In terms of equipment...we don't charge a rental fee for equipment. You can purchase equipment from any vendor you choose or from us for a one-time fee of $40. Generally this is recovered with a setup fee.