XO Communications announced today that it has signed up 1000 small to mid-sized business customers to its Voice over IP service in its first three months.

“We had created an aggressive plan and we are on target with that plan,” said Eric Hyman, VoIP product manager. “I would attribute this to the reduction of fear of adopting VoIP, and the lack of need of replacement of their existing architecture when they use our service, so there is not a huge capex requirement with XO.”

The XO Options Flex service uses an integrated access device at the customer’s premises to cross-connect existing TDM gear to the VoIP service, so that customers can use their existing phones, key systems and PBXs.

Most of those SMB customers are looking for cost reduction, Hyman said.

“They also like the dynamic bandwidth allocation – the fact that they can managed their data network and allocate more bandwidth when it is required to move large files,” he said. XO operates its own OC-192 national backbone network to carry the voice and data traffic.”

XO isn’t currently offering integrated messaging with its VoIP service, but does offer auto attendant and a Web-based administrative portal for on-the-fly changes and has seen adoption of those services. Its current XO OptionsFlex service is an analog replacement opportunity and the company will be adding digital replacement service and PRI replacement service by year’s end, Hyman said.