ORLANDO--Pac-West Telecom is expanding the reach of its wholesale voice and data operation from the West Coast to the entire U.S., beginning early next year with 36 major metropolitan areas.

The VoIP and Internet access provider had been concentrated on the West Coast, and this year tightened its focus to a wholesale model, selling off its small to mid-sized enterprise business. The company has already obtained the state licenses to take that model national, serving competitive carriers of all types, including wireline and wireless ISPs, Internet companies, rural telephone companies and CLECs, said Hank Carabelli, president and CEO.

The initial expansion, in early 2006, will reach more than 50% of the U.S. population with a suite of wholesale offerings including traditional voice, VoIP and Internet access, he said. Pac-West has already ordered switches for installation at the 60 Hudson carrier hotel in downtown Manhattan.

Customer demand

The move comes in response to customer demand, Carabelli said.

“Our customers needed a national network,” he said. “It is almost impossible for them to do everything involved – trying to get telephone numbers, connectivity, local number portability, E911 support – all the things they need to operate, that we can provide.”

National competition

Pac-West will go head-to-head with other national players such as XO Communications and Level 3 Communications, although it might also target other segments. One such segment is the rural LECs, who are expanding the reach of their networks to compete beyond their existing franchise territories.

“For the RLECs, it’s the reputation and the brand they have that they want to start extending from their stronghold territories into surrounding areas, even statewide,” Carabelli said. “Then there’s the customer group we call the ‘branders’ – companies like Internet portals, Google or Yahoo! that see voice as a nice complement to their services. And there are VoIPers who want to make money on voice. And there are wireless ISPs that are adding VoIP to their service. We target different market segments with different needs.”

Where will it all lead?

Given the disruptive potential of VoIP and the different ways in which it can be combined with presence technology, wireless access and e-commerce, it’s almost impossible to predict what model emerges from the current competitive picture, he added.

”We don’t know where it’s going to go,” he said. “The convergence of the Internet, the PSTN, the wireless network, plus all the possible technology combinations – we just can’t predict where this model is going to take us. The world is moving extremely fast right now and it is up to the marketplace as to where we’ll end up.”