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New Directions for a New Decade


THE SBC COMMUNICATIONS INC./AT&T CORP.

merger approval and the Triennial Review Remand Order (TRRO) proved the golden rule of business He who has the gold makes the rules is alive and well.

My company, Trinsic Communications Inc. (formerly Z-Tel Communications Inc.), flourished in the early competitive marketplace and built a nationwide local service footprint. We understand flexibility and change will be of the utmost priority to ensure success through the next decade.

While the future directions possible for CLECs remain immeasurable, the difference between the post-Telecom Act years and now is there is no frenzied group of venture capitalists looking to throw millions at potential. This time around, a proven track record of profitable results coupled with a commitment to innovative product and service development that delivers true value for the targeted customer is the basic success formula for those of us taking this new step.

The Telecom Act of 1996 was heralded by many as a new day for local phone service customers as it set up a reasonable model by which actual competition in the local exchange could take place, fostering more choices and lower prices in the marketplace. For a period of time, companies like Trinsic entered the field, offering not only local services, but enhanced feature sets, cross-region footprints and other previously unavailable but now commonplace services.

Achieving the first nationwide footprint allowed Trinsic, for example, to garner a customer base across 49 states and service the needs of thousands of business and residential customers. To further our differentiation, we developed an enhanced messaging platform combining now-common call-control features with an IVR interface. And, we began the process of becoming a facilities-based provider one of the desired intentions of the Act.

Despite the progress made by Trinsic and others, the combined CLEC market share in most areas never topped 20 percent. A truly competitive marketplace was destroyed in its infancy by the mandate to migrate to noncompetitive resale platforms and somewhat draconian wholesale cost increases characteristic of Bell Commercial Service Agreements.

In March 2004, when the TRRO ruling by the D.C. Circuit Court caused the swift end of UNE-P, it became obvious that our move into the IP space needed to change from a beta trial to a prime focus. We will utilize the resale opportunities that still are available albeit at a reduced margin to support our base of 250,000 lines. It will provide the fiscal foundation, allowing us to maintain both top-line and bottom-line results consistent with our plans. Growth, however, will be driven through an IP-based expansion strategy targeted at providing infrastructure services to small and medium businesses.

Over the past year, Trinsic has gotten a great start on this transition. Weve utilized Tampa, Fla., our home base, and the huge opportunity available in metro New York as the initial footprint for our IP network rollout to the SMB space. Weve installed softswitches in both cities and now support customers in both metros over our own facilities. With more than 300 customers generating more than $3 million annually from the converged voice and data product suite, weve established a firm base on which to build our geographic and product expansion. Currently, we are adding Philadelphia and northern New Jersey to our footprint, with plans for a few other cities to be added later in 2006.

At the same time, weve concentrated on delivering unparalleled customer satisfaction within our resold base, and have succeeded to the level of business line churn of less than 2 percent monthly and 100 percent retention of our enterprise base.

Our experience providing services to our enterprise customer base, which consists of a broad set of multilocation business customers using our local exchange service across the country, has prepared us well for delivering IP infrastructure services to the SMB marketplace. Many of our large UNE-P customers operate in a low-margin environment and have ensured we adhere to our SLAs and deliver value and reliability at all times. In exchange, many of these customers have realized both the expected benefits of a single provider network as well as some unexpected ones relating to a more personal customer service experience.

Trinsics plan of developing a converged IP infrastructure while maintaining a sizable resale customer base obviously is not the sole path to a successful future in the post-TRRO world. Many CLECs will utilize the commercial service agreements and other arrangements to provide a broad managed resale environment, while others will focus on wireless, Internet-based VoIP or other newer technologies.

Also, it is apparent another wave of consolidation is upon us as geographic and product suite efficiencies are realized through best-of-breed partnerships rather than capitalized expansion. As customers have come to expect a level of innovation that now cannot be denied, what will become evident very shortly is that those companies who most quickly embrace the necessary changes and best leverage their current strengths and experiences while executing their future business models will be the new leaders in the marketplace.

Michael Rogers is vice president of marketing and business development for Trinsic Communications Inc., a former UNE-P reseller turned IP carrier. He can be reached at mrogers@trinsic.com.

Links
Trinsic Communications Inc. www.trinsic.com

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