Alteva: Comcast enters its market, as it expands office space & hiring; Launches new ad campaign

Tom Paine



Plenty of things are going on with Philly-based Alteva, which since being acquired last year is a unit of Orange County, New York-based WVT Communications Group (NASDAQ: WWVY), also known as Warwick Valley Telephone. Alteva provides unified communications services, which include a platform for VoIP (Voice over Internet Protocol) along with integrated communications and information management tools, to small, medium-sized and larger enterprises.

Comcast had already built a sizable business providing communications services primarily to the SME market, but more through offering raw bandwith access rather than intelligent managed services. But in late March Comcast announced the launch of Business VoiceEdge, a service that at least on the surface sounds very similar to Alteva's. Like Alteva, Business VoiceEdge provides a hosted, cloud-based solution that eliminates the need for an on-premise PBX. Also like Alteva, Comcast' offering provides Hi-Def VoIP, is built on BroadSoft's platform, and ties in access to a package of Microsoft apps for unified communications. I don't have enough information now to compare the two apples to apples on features and price (Comcast says its price per line will run between $24.95 to $34.95, though there can be numerous variables involved when comparing pricing) but they are definitely playing in the same sandbox now.


Alteva sees Comcast's entry as a validation of the potential of its market. “Comcast clearly sees the growth in the unified communications industry and appears to be responding to this market push. But I believe we are offering a significantly different value proposition and suite of products to the cloud market,” Alteva President David Cuthbert said in a statement to Philly Tech News. “We believe that Alteva’s fully integrated offering is the most comprehensive UC solution available. While Comcast is looking to expand their services to their customers, Alteva has been a pioneer in the cloud and UC markets for many years now. Our focus on customer needs has paid off over the years and has contributed to our ability to provide our clients with a solution that helps them be more successful in their businesses.”


Alteva' solutions are not completely unique; there are several competitors with roughly similar offerings. Most of them are still fairly small with a regional focus. A major challenge for firms such as Alteva will be to establish a broader geographical footprint. Comcast's says Business VoiceEdge is now available across most of Comcast’s Northeastern Division, which is Alteva's home territory, and that "nationwide rollout across Comcast’s entire service is targeted by the end of 2012". Comcast is a huge business telecom provider already, with revenue running at about a $2 billion annual rate and growing at over 30%. Comcast will have to demonstrate, however, that it can be as agile as smaller firms such as Alteva in tailoring solutions to meet specific customers' needs.

To help further spread awareness of hosted UC solutions in the Greater Philadelphia Region, Alteva recently launched its “My Phone Stinks” contest that invites small businesses in the Delaware Valley to enter to win a complete UC system, free for an entire year.

Alteva will also be making a significant expansion in Philadelphia this summer. It has taken a lease on the former Wells Fargo branch at 401 N. Market St, containing slightly over 9,000 square feet. A renovation has been designed by Philly architectural and design firm L2 Partridge LLC (who's own website is also under construction). The space will have an open design with large windows allowing viewing from the street, and will be set up to allow customers and prospects to simulate an office communications environment and try out products and services. A major purpose of the location is to build awareness of Alteva in the area business community. The old bank vault will also be maintained. Alteva will also keep its existing space in the Bourse Building on Independence Mall (about 4,000 square feet), which will be used primarily for technical & development staff and is intended to eventually house a Network Operations Center for all of Alteva.

Alteva also continues to add staff in Philly. Plans are to bring on about 23 more employees this year to reach a total headcount of 50 by year end, the company says. Almost all are based out of Philadelphia, except for a few remote sales/customer service people.

The word is part of the plan is for Philadelphia to become the headquarters location of WVT Communications Group, although the company is not willing to comment on that now. WVT's other components are local telco Warwick Valley Telephone, based in Orange County, New York and also having a wireless partnership in that area, and USA Datanet, a Syracuse-based company acquired by WVT in 2009. USA Datanet's operations have already been integrated with Alteva's, with USA Datanet focusing on businesses with less than 35 employees and Alteva on larger customers. The USA Datanet/Alteva combination also probably results in a better mix of voice and data services. The wireline business is shrinking, and WVT has made it clear that cloud communications are its future. Alteva President David Cuthbert is also WVT's COO and President of USA Datanet, and Alteva's Chief Sales Officer Louis Hayner and Chief Network Officer Mark Marquez also have WVT corporate responsibilities.

Its a bit difficult to get a complete breakout of Alteva in WVT's financial results, and will probably become more difficult now since the lines between Alteva and USA Datanet have become blurred. At the time of the acquisition last year, WVT CEO Duane W. Albro said the company paid "3.1 x current revenue", implying revenue in the $6 to 7 million range since the acquisition price was said to be $17 million. Revenue from Alteva reported by WVT from August 5 to the end of 2012 was just over $3 million, or about $600,000 per month. A WVT financial spokesperson contacted by Philly Tech News couldn't provide any other financial details on Alteva "other than to say they are growing fast". WVT has a market value of about $79 million and currently has 147 employees.



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