An Ontario-based long-distance telephone reseller is brewing up healthy profits by aligning itself with one of the country’s major beer companies. Onlinetel Corp. hopes to parlay a successful relationship with Labatt Breweries into greater subscriber growth for its other telecom services. The Kitchener-based telco, a subsidiary of Eiger Technology Inc. of Toronto, launched Blueline as a promotional tool with Labatt last year (NL, July 15/02). A marketing letter sent out to customers this summer says the service has connected more than 30 million free LD calls to selected cities throughout Ontario. "Today we have 239,000 registered users and it grows by about 300 to 500 registered users per day at the moment," Roland Austrup, one of Eiger’s directors, tells Network Letter. "Currently, we’re processing about a million minutes a day. That’s typically anywhere between 120,000 to 130,000 calls per day and typically about eight minutes per call." The Blueline network is set up in Toronto and surrounding areas. The service area extends from Peterborough in the east to Windsor in the west and north to Barrie. A small hub around Ottawa is also part of the network. Subscribers can make free LD calls from one city in the service area to another. They cannot place calls to cities not in the grid. Onlinetel began marketing sponsored calls in 2000, a year before Eiger purchased the company. It established a free calling area in the 905 NPA girding Toronto. Using pop starlet Britney Spears as its spokesperson, Onlinetel quickly aggregated 19% of the households in the suburbs surrounding the provincial capital. Local advertisers underwrote the project. Austrup believes everyone came out a winner. "It gave the long distance caller something of value, which was a free long distance telephone call; it gave the customer something of value, which was a dedicated marketing channel; and it gave Onlinetel something of value, namely both the revenue and the ability to build out their network as the marketplace demanded more calling," he notes. "So the early route, it started out as the local pizza shop or car dealer sponsoring it in the local area to a full-fledged VoIP system that was picked up by Labatt as the anchor a year ago." Talks are currently underway with other major firms to duplicate the Labatt model. Austrup would not mention the companies involved or give a time frame for announcements, but he suggested news should be forthcoming soon. He hopes to expand the service beyond Ontario and make it a national program, although he concedes that by concentrating current marketing efforts in its home province, Onlinetel is going after the "low hanging fruit." College age demographicThe success of Blueline is giving Onlinetel the ability to cross-promote its other services. The company is trying to sign up its subscribers to flat rate services, 10-10 dial-around service and similar offerings. Austrup reports that the typical Blueline customer is 19 years old to mid-20s, a demographic that indicates college age people. In fact, traffic volumes tend to be heavier during the university semesters, declining during the summer months. The telco has its own VoIP network that extends from Victoria to Halifax. It provides telecom services in the major cities in B.C., Alberta, Manitoba, Ontario, Quebec and Nova Scotia. "We do offer flat rate calling services across the country, and into the United States for that matter," Austrup reports. "There are calls that go off of our network and of course we incur the typical termination charges to terminate calls off our network, which would be the same as anybody. But our margin of advantage definitely is when the calls fall within our network, which is where the bulk of the calls fall."