Dial Thru Counts on Military Families to Build Its Internet Phone Business

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Dial Thru International Inc. is hoping the military will come to its rescue.


The Los Angeles-based telecom carrier has been around for 10 years, starting out as a calling card company selling long distance service. Lately it’s struggled, and the stock trades for about 15 cents a share over-the-counter.


It’s betting its future on voice over Internet protocol making phone calls over broadband data lines, rather than phone lines for a flat monthly fee. And Dial Thru is launching headlong into Voip by targeting military families.


“We’re going after soldiers in the U.S. and abroad, and veterans, which is a huge market. We’re giving them the freedom to talk as long as they want,” said David Hess, Dial-Thru’s president and chief operating officer. He estimates the military family market at about 30 million potential customers.


Dial Thru has been serving the U.S. military for about 10 years through a calling-card type system called RapidLink, which offered favorable rates for military personnel calling home from overseas. Dial Thru buys space on data lines and owns its own switches.


At its height in 2002, the company had more than 50,000 military customers. But that number fell to about 10,000, Hess said, as the cell phone market took off and big carriers undercut Dial Thru with calling-card plans.


“There is no military-affiliated plan A, plan B or plan C you simply take advantage of what is available to you,” said Major Michael Schavers, a Pentagon spokesman. Military members deployed in countries such as Germany, Turkey or Saudi Arabia often use the same calling cards available to civilians or find plans through local carriers.


Dial Thru’s military program has three tiers of service (One Star, Two Star and Three Star). The basic plan involves a $19.95 startup fee, which includes a broadband enabled phone, plus $6.95 per month for unlimited calling to other Dial Thru customers.


The Two Star plan charges $19.95 per month for unlimited calling to the U.S. and Canada, regardless of whether the recipient is in the Dial Thru network. Three Star is the family plan, which costs $34.95 per month and includes multiple phone number accounts and unlimited calling.


“You can be in Paris, and I can dial that local number and I’ll get you,” Hess said. “It makes every call kind of local.”


Both parties need to be Dial Thru customers in order to take advantage of the best deals. Dial Thru sells its products through agents, usually military personnel or spouses looking to make a little extra income. They sign up their friends and family members, spreading the service through word of mouth at least that’s the idea.


The success of the endeavor will depend on whether the product offers value to callers.


“We’re consumers in uniform,” said Schavers, who is not a Dial-Thru customer or representative. “And like any other consumer, you’re always looking for the best deal you can find.”

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