The service-based operator, which generated slightly over S$1 million in the last one year, officially launched the new service yesterday.
Sakon Singapore CEO SS Bath claimed that the service will provide users savings of up to 85 percent on long distance calls, compared to the rates offered by incumbent telcos.
According to Bath, the service uses circuit switch technology and the calls are connected through fiber optic cable. Therefore, the voice quality is better than voice over Internet protocol (VOIP) calls as VOIP has "packet loss and latency".
However, the system, which routes non-Singapore calls through the island, is not exactly easy to use.
When registering for this service, applicants must indicate a non-Singapore telephone number they will utilize the service from, and a customer can utilize Singapore Dial Tone only from that assigned telephone line.
To use the service, the customer dials an access number provided by Sakon, which will connect him to the company's backend system in Singapore. The call will be automatically disconnected and the caller will hang up the phone at this point in time.
In a few seconds, the system will call back the user on the registered foreign number--the user picks up the phone and enters his Personal Identification Number upon the request of a voice operator. Then the user punches in the telephone number he wants to connect with.
For example, a user in Hong Kong who wishes to call a number in the UK will dial the country code, area code and the seven-digit phone number of the UK party.
The call will then be rerouted to UK through Singapore and the user will pay for the rate between Hong Kong-Singapore and Singapore-UK compared to Hong Kong-UK rate commonly charged by incumbent telcos.
Bath claims that at on average, a connection between Singapore and any other country is approximately S$0.25 per minute. Assuming that the rates for Hong Kong-Singapore and Singapore-UK are S$0.25 each, the user pays S$0.50 per minute to call UK from HK.
Exact rates were not available as Sakon's Web site was down at press time.
This not-so-easy system becomes even more complex and cumbersome when the user wants to utilize the service from a telephone line other than the one first registered.
In this situation, the Hong Kong users will have to call Sakon's back end system in Singapore and indicate that they plan to use another line.
Another drawback in this case is that the customer must pay their local telco a long distance charge when making the change.
Bath said that Sakon plans to sell this service to multi-national corporations and small- and medium-sized enterprises outside of Singapore through three different channels. He expects to rollout the service in 35 to 40 countries in a year's time.
He noted that the first channel is to establish direct contact with its customers with its six sales staff based here. The second is through 100 sales agents around the world. These agents will receive a commission from Sakon based on the airtime their clients clock. The third channel is through resellers, who will buy Sakon's international call back service in bulk at a wholesale price, which they will in turn sell under a different brand.
Despite the complexity of the system, Bath seems convinced that his new service will be a success and is confident that the company will hit the S$55 million target.
"In my experience, when a company can save anything more than 15 percent using a new service, they will go for it, no matter how complex it is," Bath maintained.
He added that the company will educate its target audience about the service through personal selling.
Nevertheless, Sakon is likely to face an uphill task in meeting its sales targets, analysts said.
"The company (Sakon) will be entering an extremely competitive market where it will face tough competition from incumbents such as the SingTels and Hong Kong Telecoms of the world," Frost and Sullivan industry manager for Asia Pacific telecommunications Manoj Menon told Singapore.CNET.com in a telephone interview.
"Its success strongly depends on its ability to build a brand equity in the shortest time possible, educating its target audience of its service and its sales and marketing strategy," he added.
"It doesn't matter even if it uses circuit switch technology," he noted, "because VOIP such as SingTel's 019 and StarHub I-Call 018 service have quite good voice quality and the prices are competitive."
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