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Connecting With ISPhone - page 2

Into the Wayback Machine

  • May 12, 2008
  • By Gerry Blackwell
ISPhone provides call termination for all its customers, including the North American ISPs it once thought would be its exclusive clientele. But North American ISPs now represent a minority.

As the arbitrage opportunity dried up here, the global spread of telecom deregulation opened up new arbitrage markets overseas. Today, of ISPhone's 2,000-plus customers, "most" are offshore--in Africa, parts of Asia, the Middle East, and Eastern Europe.

In most countries outside North America, telephone service was exclusively provided by PTTs (Postal, Telegraph, and Telephone companies) that were sometimes corporations and sometimes government ministries (imagine competing against the FCC). But because the powerful World Trade Organization (WTO) has mandated telecom deregulation, governments that want to play in the new globalized economy are having to loosen the hold of their PTTs on the industry. And on lucrative phone service revenues.

"Some are moving pretty quickly," von Schlegell says. "Some are moving as slowly as they can."

He sees a continuum of regulatory climates. In some countries, offering telephone service in competition with the PTT is still a black market activity. Participants are not only shut down when found but may end up in jail.

And then there are various shades of gray, starting with countries where competitive telephone services are still illegal, but the government turns a blind eye. At the other end of the spectrum are "white" markets, places like the U.S., Canada, Australia, and most Western European countries, where "anybody can do anything."

About 10 percent or 15 percent of ISPhone's customers are in black market countries, 30 or 40 percent in white markets, the majority in gray markets. Von Schlegell can track the spread of telecom deregulation as the number of enquiries the company receives from a country or region starts increasing.

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