Questions about service offers disposable phone numbers, for free to end users. While I can certainly see the benefits for users of the service (particularly for use in Ebay and Craigslist listings), I don’t understand how this will morph into a sustainable business.

The service claimed to have 317,000 users as of June 2007. I assume that means at least 317,000 phone numbers. Someone may be able to correct me, but as I understand it, the typical price for a US number at wholesale is about $2 per year, plus usage. These calls must terminate somewhere, so somebody, (presumably is also eating that cost, again, at wholesale, maybe about half of a cent per minute. And since they will bridge the call to your real phone number, you can double that cost. That suggests to me that has spent at least $700K (paid to third parties) to provide service to those 317,000 customers, before development, operations, sales and marketing, or any of their other internal costs. And they have not yet collected any revenue. That’s more than your average hacker is willing to front.

Further, claims that “Allocated numbrs are unique and they will not be reused.” I thought it was a violation of North American Numbering Plan (NANP) rules to have such a policy? I thought, as part of the deal to get numbers, you had to agree to a policy of efficiently using those numbers, to avoid exhaustion (somewhat like the way we must agree to ARIN rules in how we allocate IP addresses). If the number is NEVER going to be reused, this would suggest that must continue to pay somebody to “hold” the number, right?

I seek clarification from those better informed than I on the above two questions.

It seems to me that, unlike your typical web site, everything is offering has real cost, and no particularly strong cost advantages from VoIP or the Internet. As Moshe Maeir recently said There is no such thing as free with these kinds of VoIP products. So what am I missing?

Update: Aswath cleared a lot of this up for me. They have numbers in about 30 areas and hand out ‘extensions’ so your personal number is something like (314) 766 4046 x 987 and not a direct dial number. We can presume that they receive a cut on the minutes for the inbound side and that this pays for the outbound leg of the call.

6 comments for “Questions about service

  1. I know the answer to one of your questions: they do not issue a unique PSTN number; instead the uniqueness is in the extension. So they can afford to throwaway an extension number. And no worries from the numbering plan administrators.

    As for cost, I think they are probably getting termination charges for the first leg of the call and using it to pay for the second leg of the call. Phoneboy stated in his blog entry on this service that they are breaking even. That must be the reason.

  2. Oh, I see. So callers have to dial a number (perhaps not local to the location of the sale, i.e. a toll call) and then enter an extension?

  3. They have numbers available for about 30 areas. So for some people it will be free calls and for others it will be toll calls. Yes, the callers have to dial an extension.

  4. they seem to have some sponsers as well. they might be working on moving to an add model when they get enough customers to be attractive to prespective accounts.

  5. they could be simply trying to establish themselves and then sell the company to ebay or someone else that would provide it as a service to attract people to there core business.

  6. another possiblity: the service is run by the FBI and/or CIA who believes it will attract lots of criminally minded people. as they collect real phone numbers and email address’s they put them into their databases.

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