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Comment by misterprime | Hacker News Reader

Clever, but it still sounds like it wouldn't add up to that much. They only make a small amount when it connects to a user connected through a small phone company right? Based on this description connecting someone on AT&T in NYC to Verizon in LA wouldn't result in any revenue.

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I guess the conference call company is located behind a small rural carrier? Then they can charge the incoming AT&T and Verizon callers 8c each.

You would think if this was costing the big carriers too much, they could just offer their own free conference call number.

They could even spam users with a text message about their own service after someone makes an expensive call to one of the free conference call numbers.

You put the conferencing gear in rural telco colos where the termination fee is high.

It’s a public policy (universal service fund) arbitrage play.

Is it just an Asterisk server with some T1 cards?

Is this not viable anymore?

I worked for a now defunct company that was making $7mm/year doing this. With only 4 people on payroll.

Out of curiosity, why did it go defunct?

I am not sure if this is related but I also worked for a company that had this business model and they were desperately trying to change their business model because the money that came in from these calls was decreasing and would eventually stop coming in. It could be that they stop making enough more.

It could also be that they were bought by a different company that had this business model (something that my old company did all the time.)

I don't know all the details, but supposedly the telecom we were partnered with got in trouble with the FCC? and ended things.

It sounds like they get ~$0.04/min for every user. I bet that adds up!

Back of the envelope calculation:

Avg of 30 min conference calls x say 1 million users per month = $1.2 million a month, or $14.4 million a year

These sort of rates were real in the past, but regulatory changes have decreased them dramatically. In general, much less than $0.01/mi at wholesale rates.

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