41 Telegate

For most people, the extent of their knowledge and use of voice-over-internet (VoIP) phone services starts and ends with Skype. However, for businesses, the use of this internet technology can involve a much wider range of voice and data services.

The founders of Telegate recognised this niche in the marketplace and started their company in 2011 with the aim of specifically servicing the telecommunication needs of SMEs.

“The business was started to accommodate the VoIP revolution that happened in the late 2000s. There was a niche in the market for the SMB (Server Message Block) space which was being neglected by the larger carriers,” says Telegate co-founder Tristan Plummer.

Telegate soon realised not only were SMEs being largely ignored by the bigger players in the space but Australian companies had also been slow to capitalise on the massive potential of this market segment in the Asia-Pacific.

“Our competition is not there and we are pioneering a lot of work to deliver a satisfactory solution. Outside of Telstra Global there are very few companies winning business in Asia,” Plummer says.

Telegate is now generating between 20-50% of its revenue from the Asian market and Plummer says this figure is only bound to grow.

“The next 24 months will see Telegate more focused on the Asian markets. We aim to have more than 60% of our revenue being generated from international customers,” he says.

While the growth in overseas markets has been pleasing, the business has also had to contend with some of the same issues their SME clients would also encounter – chiefly, ensuring there is sufficient cash flow to keep the business growing sustainably.

“Growth is very difficult to manage well,” Plummer says.

“Every dollar invested into this area is a dollar taken out of cash flow. All the privately listed companies in this area would have felt this over the last year.”

The company managed to negotiate extended credit terms with its suppliers, something that has helped it smooth some of the inevitable kinks in its upward trajectory.

“In our case we asked our suppliers to assist with funding the growth,” Plummer says.

“This was simply allowing us to extend our credit terms from 14 days up to 90 days in some cases. This caused some friction but we are now a much bigger customer to them and we are loyal because of their commitment to us. It has worked well for all parties.”

Plummer says the VoIP sector of telecommunications is still in a strong growth phase and he says the medium to long-term forecast for the sector looks good, especially for the Asia-Pacific market.