PARTNER CHANNEL: CallKey Puts New Twist on Callback

Posted: 8/2003

CallKey Puts New Twist on
Callback

By Paula Bernier and Khali
Henderson

Startup
CallKey Ltd. has a new take on international callback service. Rather than a
call-in number, the company’s technology relies on wireless text messaging, Web
or Microsoft Outlook-based communication to initiate the calls.

Like ’90s-era callback companies,
CallKey seeks agents and distribution partners to reach potential business and
residential customers.

Although CallKey’s executives are
uncomfortable referring to the company as a callback service provider, CallKey’s
value proposition is basically the same: to provide customers with lower
international calling rates by bypassing originating long-distance carriers and
their often more costly charges.

Director Richard Freeman says
CallKey will offer international rates that average 70 percent lower than a
monopoly incumbent carrier would charge. A cellular call from the United Kingdom
to the United States, for example, typically costs about $1.36 per minute, he
says, but using CallKey, it’s nearer to 20 cents a minute. A U.S.-to-U.K. call
using T-Mobile, he continues, is averages 27 cents a minute, while the CallKey
rate is about 5 cents a minute.

With a Nortel DMS-250 switch in New
York’s 60 Hudson carrier hotel and a U.K.-based hosting site, CallKey will be
able to offer its services anywhere in the world, with all services completely
localized for the country in which they are offered.

The company is beginning its
marketing effort in Greece and Britain this summer.

"Our intent is to be as global
an organization as possible, but we certainly realize from our own dispersal
across the world – we have some members in Europe, some in the U.S. — there are
distinct regional differences," says Kurt Roosen, operations director.
"What we don’t want to do is market a U.S. company or a U.K. company in a
U.S. or a U.K. way. We want to do it in a very specific way to the local market.
The best way to do that we feel is to create significant margins that we can
give to local representatives to actually create that regionalization for us and
fully represent us in that area with the correct language, the correct protocols
and the correct customs."

CallKey is seeking to develop a
two-tier indirect sales channel with exclusive master agents each with
in-country subagents. Agents can be commissioned or margin-based depending on
their target market. Agents selling to consumers, who will pay via credit card
and can be served centrally by CallKey, will earn commissions. Agents serving
businesses where they have to bill according to local protocols will pay CallKey
a wholesale rate. Roosen says the margin/commission is around 20 percent.

CallKey also is seeking distribution
partners among international carriers that would be able to rebrand the service
as their own. Roosen explains: "The way our system works is that calls can
be initiated from anywhere but it comes through a wholesale backbone that exists
in the U.S. So, you can actually bring traffic and volume from any country in
the world back to a U.S. network. We are working with some people whose
wholesale network is in the U.S. to distribute our product and encourage traffic
back to their network from places where they don’t have physical presence
themselves."

A good example is mobile traffic
originating in Europe that passes over the local wireless carrier network.

The company also will have a
traditional wholesale international termination business by allowing VoIP
carriers and large corporations to piggyback on the volume discounts it receives
from its underlying carrier. "We are very open to people almost connecting
directly into the wholesale backbone that we use," says Roosen. "That
may range from VoIP termination that we call brokering right to very large
corporations connecting their PBXs or IP PBXs right into the backbone for
least-cost routing."

CallKey, which is funded privately
through its directors, also plans to offer conferencing services for less than 5
cents a minute. And, in yet another twist on callback technology, CallKey also
has developed a special router to enable it to offer ship-to-shore
communications in concert with Inmarsat, cutting out the local provider
typically involved in such communications.

CallKey Facts