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NebuTel hopes to ring up profits in the bay area

By JEFF HARRINGTON

© St. Petersburg Times,
published July 30, 2001


You don't have to tell Larry Hall that launching a company is a learning experience.

As president of a Melbourne outfit called NebuTel Inc., Hall thought he had a high-tech business pitch that couldn't miss: offering long-distance service using voice technology developed for the Internet.

The sound quality is better than going through the Internet, Hall says, because NebuTel channels the digitized calls through its fiber network. Moreover, for customers who like to make a lot of long-distance calls, the service is cheaper than comparable plans by big guys such as AT&T and Sprint.

Problem was he started the company in January, right before the telecom bust. By the time he began pushing into Orlando and the Tampa Bay area in April, he and his partners had lost some investor support and were forced to "self-fund" their advertising.

Other obstacles came along the way, like a lawsuit that prompted the company to drop its original name (SpaceNet Inc.), trouble getting local access and a long-term contract that scared away potential customers.

Not to mention a rather big flaw in the original game plan. NebuTel initially charged a flat fee for unlimited long-distance and home telemarketers were quick to seize the opportunity.

"One guy burned me for over $2,000 in one month," Hall said. "Twenty-nine of them ran up a horrendous phone bill."

NebuTel adopted a new fee schedule: $34.95 a month for up to 5,000 minutes (plus a one-time setup fee of $35). It dropped long-term contracts, shifting to month-to-month.

The new NebuTel says it has up to 200 customers in the bay area. The Brevard operation broke into the black in April; Orlando should break even by the end of the month; and Tampa should break even by next month, the company predicts.

Despite everything, Hall boasted last week, "We're ahead of schedule."

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