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Ooma Sees Its VoIP As Trojan Horse

Las Vegas — They may be giving away free telephone service over the Internet, but they’re not a VoIP company, insisted Richard Buchanan, chief marketing officer, Ooma.

Free voice is merely a Trojan horse to get a sophisticated wirespeed router into consumers’ home, Buchanan said. For $250, consumers receive the router and a “scout” device that connects to a cordless handset. From there, it’s free long-distance and local calls for life.

Once inside the home, Ooma hopes to sell a number of enhanced features to customers. Some, like the current premium subscription package, will be telephony oriented. Other offerings still in the works will focus on features such as Internet security, anti-virus and bandwidth monitoring, among others, Buchanan said.

Roughly 22 percent of current users have stepped up to the $12.99/month premium package, he said.

Ooma recently expanded into national retail, buoyed, they said, by the economic downturn, which has forced consumers to look for money-saving solutions. In the middle of the year, it will transition from the original hardware to the telo, which will be available in a variety of multihandset bundles depending on distribution channel, Buchanan said.

How can the company sustain itself by offering free telephony? Buchanan said that by the end of 2009 it won’t cost the company any money to add new lines. The company also makes money on 411, international and 800-number calls, he said. While declining to cite specifically how many users Ooma had, Buchanan said the company was adding “tens of thousands a month.”

In the future, more wireless products and potentially a caller ID-enabled digital photo frame are in the works, Buchanan noted.