FierceTelecom: Are there specific markets segments where the need for Ethernet is ripe?
Pistacchio: Health care has been consistent in terms of its use of telecom technology. Financial markets certainly are strong even in the downtown as they think about how to save money, so for them Ethernet has a compelling story. The media transport marketplace is another one. Traditionally, media transport was done over 270 circuits, and we were the first service provider to do it over Ethernet. We're not pricing our services based on mileage. Instead, we're offering flat rate pricing and very compelling price points for Ethernet to carry video.
I will tell you our number one selling product is our voice/Internet bundle where we are packaging our Internet access with bundled voice minutes. They are obviously not spending the kind of money like they would on GigE, but when you're selling 20 Mbps 50,000-unit bundles it's very popular because its flat rate and very predictable.
FierceTelecom: When you say voice minutes, do you mean IP voice or is it traditional TDM voice?
Pistacchio: Whether those voice minutes are originating on an IP platform or a PBX, what they are buying from us is a package of calling minutes. We do support both, of course, as our customers move to IP, we are helping them do so with our hosted and premise-based VoIP platforms. As our customers move to IP, we're essentially supporting their calling minutes regardless of how they originate.
FierceTelecom: With the economy not in the best shape, many service providers reported some slowdowns in the recent quarter. Has that had a major effect on Optimum Lightpath?
Pistacchio: What we have seen in the first half of the year is that some of the sales take longer, especially in the larger enterprises. There's a lot more scrutiny in some deals. That just means you need a lot more deals in your pipeline to meet your objectives. We're on track to light the same number of buildings with fiber this year. I think the answer is while it takes more work to close deals, the deals are there and they are there because of the value proposition. We're seeing good growth and hopefully that will continue because it seems like the economy is starting to stabilize a bit.
FierceTelecom: While there's a lot of focus on the large and SMB markets, I am hearing more about the mid-market opportunities. Are you seeing more of this opportunity?
Pistacchio: We think there's a huge opportunity in the mid-sized business market to provide service and value that the incumbents have struggled to get. The ILECs traditionally have done a reasonably good job with their large enterprise clients, but the mid-market companies have been neglected. When they call into a customer call center, they are getting routed to an IVR in Texas and finally get to talk to someone who can't solve their problems. They are also the ones that have pricing that's all over the map.
We've attacked that marketplace with what they want: excellent customer service and flat rate pricing. We think in all cases we have seen these companies are focused on simplifying their life. They are companies that don't have huge staffs to analyze their telecom spending. They need help so we designed our product set and our approach around helping them as well as a very aggressive approach to large businesses.
Click here for Part 3 of Pistacchio's interview