How Made Audio Conferencing Free

Story by Benjamin F. Kuo


If you are like us, a huge number of the conference calls you participate in are enabled by a company called, which has enabled free conference calls for millions of startups and large businesses alike. But, how can the company offer up free conference calling services, and what's the story behind the service? is a Long Beach company which was founded by David Erickson. We sat down with David to learn more about, and how the company has created an empire stretching across 55 countries, all based on offering up free conference calls – fully paid for just based on your telephone call to their calling numbers. David founded in 2001.

Tell us a little bit about

David Erickson: We provide a conference calling service, like any other kind of conference call. It provides all of the functionality of a conference call, and offers up a very simple, straightforward service with lots of features, and is a very intuitive thing to use. What's different about from other conference call companies, is how that connectivity happens. We decided to use basic, toll numbers, versus toll-free numbers for conferencing. Other services give 800- and 888-numbers. The reason we did that, is we knew that phone companies get a little fraction of a cent for every minute that a call was connected to their exchange, so when we went around and told them we could incrementally increase their traffic, they were very interested in hearing about it. Because of that, we figure we wouldn't have to bill organizer fees. Some people think that has had to use a different bridge than a typical, industry-standard conferencing call, but that's actually not the case. It's just the way we chose to connect the bridges and our partnerships. Why that is now very interesting, is pretty much everyone has unlimited long distance, and things have really become very commoditized. Toll free numbers don't make any sense anymore, particularly when fifty to sixty percent of people are on cell phones with unlimited long distance, and it really makes no difference to them or not if it's toll free or not.

It seems like you have a huge amount of penetration in the market – nearly every conference call we are on now comes through your service. How is that?

David Erickson: I was a lucky guy, I think. I put the domain name on the greeting from the start, and conference calls were pretty expensive. So, a user would get an account, and they'd invite an average of five people onto their conference call on average, they'd hear the greeting, and they'd say – is this conference call really free? Our organizers would say—we never have received a bill, and those people would sign up. It seems to work all the time. We get between 150,000 to 160,000 customers a month. We get around 22 percent of those users from our marketing efforts, but the other 78 percent are from viral effect and word of mouth—all those people hearing the greeting and going to the web site. That's been a huge part of our growth.

A couple of years ago, there were some FCC rule changes to the Universal Service Fund, how has that impacted your business?

David Erickson: We were really closely involved in that thing. There were some companies, like Qwest, who really wanted to band our business model. The reason why, is Qwest is a local exchange carrier, and they were doing lots of local exchange business for lots of conference companies. They really didn't want to have to be competitive and share their exchange rates with those companies. But, AT&T and Verizon made a pretty big stink over that. Ultimately, the overall industry is going to the bill-and-keep model, which means that a fraction of a cent I get from the local exchange would disappear over time and go to bill and keep. That means that I pay my phone bill, and my phone company doesn't have to pay others, they just keep the money. That economically works well in a monopoly, but not anything else. However what we've done, is we've worked hard since then to create our own network, and we own more of the network, so we transport minutes to our network, and even after sunset of how things are done now, we'll continue to make revenues off of incoming calls. I'll give you a good example. Wireless networks are a bill-and-keep network, but you can't just decide you want to send Verizon a couple of hundred minutes and not pay. They will charge you to connect to their network, and for every minute you put on the network. That's the same basic model we'll have, and we'll probably be charging carriers to connect to the network.

How do you differentiate yourself from the crowd, and from lots of new services like yours who seem to pop up here and there?

David Erickson: There was a time when a whole bunch popped up at one time, and that kind of created a little confusion. However, we have always been concerned about conference quality, so we built our own conferencing bridges, which enabled us to control the quality of the call. There were a lot of guys who went into it, but none really did that well. We were definitely a dominant player, and remain dominant. We'll probably top 8 billion minutes a year in just audio conferencing, which is a considerable part of the industry. Conference calling is still growing. You are seeing revenues coming down, even though traffic is growing considerably, so as things get tighter and pricing comes down, it's much more difficult to enter this market. We're already seeing that. I think the days of new conference call companies popping up are pretty much gone. 2006, however, was hotter than a biscuit.

We see you also have premium services—how big of a part of your model is that?

David Erickson: It's been good, but the main product people actually use is the conference call. We'll be adding other features, like screen sharing, and a video beta for video conferencing. We also have things where you can change your hold music, change the greeting at the beginnings, and so on. We see a good amount of revenue from upsells from things like that. However, the way the system is designed, it doesn't require anyone to buy anything. The free conference call is the product. All those other things are really just things which you need to be a good audio provider. We've been partially driven to allow upgrades for the revenue, but you pretty much have to offer those things to be a true audio conferencing company.

We imagine this is pretty equipment and infrastructure intensive?

David Erickson: We have a lot of infrastructure. In every location we have, we have a conferencing bridge, session border controllers, and in some areas even actual phone switches. We operate in 55 different countries with the same business model, and our bridges are geo-dispersed. A bridge in France and a bridge in the United States both can take the same access code, and connect on the back end, so you can create a geo-diverse conference that happens both in France and the U.S. With lots of other conference companies, they might trombone through the network to connect a call from Paris. That's not a really good way to do it. We have three Super POPs in the US, one at One Wilshire, one in Termark in Miami, and one in Surmak in Chicago. We have a Super POP in London, another in Singapore, and a global ring that ties all of those five locations together. That way, if there's ever a cut, the traffic can go the other way around the ring, and we'll always have connectivity. From there, we spiderweb out from Singapore, London, and the US to the rest of those 55 countries we're in.

What's the next step for you company?

David Erickson: I think where we're headed, is into the enterprise. We have historically gotten customers one-at-a-time from our website. We found, when we looked at all those domains of people registered on our service, 490 of the fortune 500 are using our service. However, we haven't had any relationship with those companies. Now, we're starting to go into those companies, talking to their tech departments and others, and told them to use company-wide. That's been very good for us. We've spent a lot of time developing what we think is the best, audio conferencing bridge on the planet. We're building a really nice network on top of that, with superPOPs and a ring architecture. I think we can be a real contender, going directly to the enterprise, something we haven't done before.



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