How Hip hopes to hop the hype

Sitting in a Toronto café, Michael Garbe flips through the March issue of Telemanagement. He stops on page three - the editorial headline catches his attention. "Well," he says, "you could say the ‘IP buzz overtakes reality for telecom buyers' but in a year or two, you won't have a choice." He's right - and with his new hosted IP-PBX business ramping up, he's hoping to capitalize on that fact.Garbe is at the eatery to tell a reporter about Hip Communications Corp. (http://www.hip.ca/), his latest venture. Carved out of the retail-industry-focused DSL network provider Accelerated Connections Inc. (an earlier Garbe brainchild), Hip proposes to make modern phone service easy and inexpensive for small and mid-sized businesses (SMBs).IP communication has become something of a foregone conclusion in the telecom landscape. Carriers of all sorts sell IP phone services - Vonage, Skype, Bell Canada and countless others. At least one network equipment vendor boasts that upwards of 90% of its sales are for IP phone systems, instead of TDM. As support for the old fashioned equipment falls away, even IP skeptics must face the fact that sooner or later, their phones will use Internet Protocol, like it or not.But this inevitability doesn't dictate the shape of the market - and insofar as Hip hopes to capitalize on IP's ubiquity, the firm also hopes to make its mark during the industry's current upheaval. Who knows which service provider business models will succeed? Will companies largely opt for phone systems stationed on premises? Will businesses flock to hosted phone services such as Hip's? Will they eschew Hip and buy from incumbent providers such as Bell instead?Hip's service rides on DSL connections into the customer's offices. The provider can divide a single data connection to support both voice and data (packet prioritization included) or offer two DSL links, one for voice and the other for data. Hip's equipment resides in Toronto, where it aggregates connections from Bell and Telus, and links to more telco networks are on the way, Garbe says. By collecting them in Toronto, Hip supports cross-Canada connections with a sole and short hop at the data centre.Garbe says Hip's claim to fame will be its robust network. It already supports thousands of important financial transactions every day among Accelerated's retail customers. The IP phone service taps into this strong underpinning.But is that enough for Hip to succeed? The firm faces tough competition from the incumbents, other IP Centrex providers, the Asterisk open-source IP-PBX phone system, and Skype, which is making a play for the business customer. Vonage and the Flat Planet Phone Co.'s VoIP resale plan also represent competitive offerings. Despite the competition, Hip seems confident. Ben Lucier, VP, notes that Asterisk is all well and good if you're willing to tinker with the telephone system, but for non-hobbyists, it's a non-starter. Skype and other Internet VoIP systems have poor quality-of-service reputations and are far from being business-calibre. Even if Flat Planet succeeds in turning everyone into a vendor, few companies would risk purchasing from an untested provider."We hate calling it ‘business VoIP,'" Garbe says of Hip's voice offering. The firm prefers "business IP telephony" because the term "VoIP" brings up certain notions, such as the primarily residential-class services of Vonage and Skype.Hip's product runs on the Tekelec carrier-class communication platform, which supports many IP phones, Lucier says. Garbe says Hip will turn on data backup, video surveillance and digital signage products soon. "We wanted to work out all the kinks first."

How Hip hopes to hop the hype

News | March 28, 2007

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