Datanet seeks business clients
Company that cut its teeth on residential phone services looks for new revenue.

The Post-Standard
By Tim Knauss
Staff Writer

Wednesday, May 24, 2006 Syracuse telecommunications company USA Datanet today will launch a phone-and-Internet service for small- and medium-sized businesses, branching out into the commercial sector from its traditional role as a provider of residential services.

The new "hosted IP communication service" provides businesses with digital telephone service and Internet access over a single broadband connection managed by USA Datanet.

The service is intended to offer cutting-edge features at a lower price than is typically available to small businesses, said David Montanaro, chairman and chief executive officer of USA Datanet. The company's main target is businesses with 10 to 200 employees.

"The largest segment of the business marketplace the small and medium business really is under-served," he said.

Here's how it works:

USA Datanet supplies the customer with Internet Protocol phones, which transmit calls as bits of data rather than as traditional analog signals. The phones are tied through the customer's broadband connection to USA Datanet's network operations center at the State Tower Building in downtown Syracuse, where the software and hardware that runs the system resides.

USA Datanet charges the customer a flat monthly fee, which varies with the amount of bandwidth, the number of phones and other variables. The customer does not have to buy phones and networking equipment.

"We're confident we can offer a bit of a discount compared with what (customers) have today," said Scott Matukas, president.

The new service marks a shift for USA Datanet, which was started in 1998 to serve the residential market. The company made its name selling residential long-distance service, then added dial-up Internet service, Voice over Internet Protocol service and other products.

The company has about 350,000 long-distance customers nationwide.

USA Datanet also sells its residential services wholesale to other communications companies, which market them as their own.

The hosted IP service is the company's first retail service aimed at commercial customers, a potentially lucrative segment of the market. Industry analysts expect telecommunications spending by small and medium business to skyrocket during the next few years, Montanaro said.

USA Datanet has hired a vice president of sales, Dino Dimkopoulos, and three salespeople to promote the service. Marketing will begin in Central New York, then spread.

"It's a pretty big push for us," Matukas said.

If it succeeds, commercial service could eclipse residential service as a source of revenue, he said.

USA Datanet plans to lease new high-speed connections for its customers when they sign up for service. Customers could use cable, DSL, T-1 lines or fiber-optic lines as the connection for their hosted IP service.

Hosted IP service allows customers to program and manage their phones easily by logging onto a secure Web site, Matukas said.

USA Datanet employs about 100 people at its office in Armory Square.

You can contact Staff Writer Tim Knauss at tknauss@syracuse.com or 470-3023.