FreeConferenceCall.com may be pretty easy to take for granted because, well, it doesn't cost anything.
Yet the Long Beach, Calif. phone conferencing service has become the nation's No. 3 provider of conferencing and collaboration services and has racked up rapid corporate growth, more than doubling its minutes-used volume and its workforce in the past five years.
On the heels of being named one of the five largest conferencing providers in the world by Wainhouse Research, FreeConferenceCall.com CEO David Erickson last year named Robert Wise to serve as president to lead the momentum and continue to drive the company's growth.
Company has doubled workforce, sales volume in five years
Founded by Erickson in 2001, FreeConferenceCall.com has grown from 60 employees to 120 in a mere five years and has more than doubled its minute volume in four years.
Part of the reason for its growth, no doubt, is that video conferencing is still an inexact science with residual technical problems, and because many people are reluctant to be viewed on line -- especially when they're at home in their pajamas. Besides, teleconferencing works well enough, and that's all most people need.
"By conferencing volume, FreeConferenceCall.com ranks as the No. 3 provider after InterCall and AT&T within the U.S. market," Wainhouse Research said in a report released July 7. The report is titled "Big Ideas to Make Your Conferencing Costs Smaller: How to Reduce Your Conferencing Bill Dramatically While Keeping Services the Same."
FreeConferenceCall.com is the largest privately-owned conferencing and collaboration company in the world, numbering more than 800,000 business customers worldwide, including users from nearly all Fortune 500 companies.
Service now available in 55 countries
Service offerings in more than 55 countries with unlimited use include high quality free HD audio conferencing; Web conferencing and screen sharing; audio and visual recordings; customized greetings; security features; desktop scheduling, and mobile applications -- all featuring 24/7 customer support.
So how can this company provide all those calls for free? Well, it's a little complicated.
The company's business model has evolved over the last decade. It used to be that conference-call carrier received a portion of the income rural carriers received on the interconnect tariffs that the government once allowed them to charge.
The telecommunications act of 1996 allowed small rural phone companies to charge other larger phone companies a "termination fee" to access their lines. Basically, if you had a small phone company in Iowa or South Dakota, you could charge AT&T or Verizon when folks called into your area code. The government allowed this to happen because small phone companies had high costs to throw up a line to that rural Iowa farmhouse, but they don’t make much money from it.
However, more traffic means more income, so the rural carriers had a brilliant idea: If they could get businesses with a lot of incoming calls, such as conference-call services, they could make more money. So they started cutting deals with conference call companies, 900-number lines, and others. If they charged a termination fee of, for example, 8 cents per minute at a particular location, they could pay a conference bridge company 4 cents per minute and still make 4 cents on the call. Conference calling is relatively inexpensive to set up. FreeConferenceCall.com and others were able to offer free service to customers and still make money per minute.
But this isn't the case anymore. The rules have changed since the Federal Communication Commission released the Connect America Fund (CAF) order in 2011, which was enacted in 2012. As a result, rural telephone companies no longer may charge a rural rate. They receive no rural exemption and operate exactly like any other phone company serving a conferencing provider such as ATT. Thus, it's no longer a rural play but rather a tandem model in which FreeConferenceCall.com and others are able to serve rural telephone companies that receive the same rate as Tier 1 carriers around the nation.
Projected to be a $5 billion business in three years
Wainhouse forecasts considerable growth from the mid-to-large enterprise segment in both unified communications and cloud services, as the worldwide UCaaS market is expected to be approximately $4.9 billion by 2018. The audio conferencing market is predicted to grow over 300 billion minutes by year-end of 2019.
With an estimated 1.3 billion mobile workers worldwide, there is an increasing demand for conferencing and collaboration services that allow organizations to meet more often, save time and reduce travel costs, the company said.
Wise recently led the launch of FreeConferenceCall.com for Business as the enterprise solution for conferencing and collaboration. The Wainhouse research report also revealed that more than 90 percent of IT decision makers said free conferencing services were on par or better than paid services offered by competitors and that they would consider switching providers if the new service cost 50 percent less than the current one.
Oracle on May 21 announced that FreeConferenceCall.com for Business is now available in the Oracle Cloud Marketplace to supply instant conferencing for Oracle Sales Cloud users.
Editor's note: This has been updated to clarify the business model of FreeConferenceCall.com.