XLN: Small business interests

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Fixed line service provider XLN Telecom targets business customers in the market for fewer than five connections.

It might appear on the face of it to make little commercial sense, to require considerable legwork to achieve any kind of significant volume, but then XLN Telecom claims to be champion of telephony provision in this small-business sector.

Hidden away next to rail tracks in Vauxhall, south London, staff on three floors of an ugly block pursue such opportunities. XLN Telecom has doubled turnover every year for eight years. Its latest financial results are expected to show turnover of £60 million and profit of £13 million.

It has 120,000 customers on its books, and 150,000 connections – illustrating the size of business accounts it goes for. It claims most fixed line providers tend to ignore this part of the business market.

It has aspriations to repeat its feat as a fixed line provider in the mobile space due to its high acquisition costs and low margins.

XLN Telecom founder and group manager Christian Nellemann (pictured) says larger fixed line providers like BT and Opal Telecom have the corporate and large business market sewn up.

It makes little sense for an independent provider like XLN Telecom to  compete in the space. The very small business market, however, has proved fruitful.

“When I say we target small businesses, I mean the small business market. You know, the SME market is defined as businesses of between one and 250 employees. I don’t consider business with more than 50 to be small businesses. And we target companies with five employees maximum. We have no interest in anything larger,” explains Nellemann.

“We are very focused on that end of the market. Whether our model stretches over to much larger customers remains to be seen. There are not many ‘clean’ companies in our space, in the sense they are focused purely in this area; a couple perhaps, but no more. Do we want to be a small fish in a big pond, competing with BT? Or do I want to be the biggest fish in a much smaller pond?”

Full article in Mobile News issue 459 (March 15, 2010).

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