PHONOVATION HAS signed a €7 million three-year deal with UPC Business as part of a strategy to expand into Europe with integrated voice and SMS services. The 22-year-old Irish company believes the time is right to take its products to a wider market and chose UPC for its overseas footprint.

“UPC’s international network brings calls back to Dublin at no additional cost and allows us to sell into 11 different countries across Europe without having to invest in infrastructure,” said Gavin Carpenter, sales director of Phonovation.

UPC will carry Phonovation’s voice traffic on a national and international basis, and host its switches in its data centre. Better-known for its cable TV services, UPC has invested €1 billion in a national fibre network to help grow part of its business that already counts HEAnet and Citibank as customers.

According to business services director Gavan Smyth, UPC is increasing its share of the corporate market where it finds itself competing against Eircom and BT. “The business grew 18 per cent in a difficult climate in 2009 and we expect something similar in 2010,” he said. The deal has a reciprocal element for UPC as it plans to sell on Phonovation’s voice and text services as white-label products to its customer base.

For Phonovation, the investment is the latest move in a strategy that began four years ago when it moved away from a business model weighted around premium-rate phone calls to services using interactive voice response (IVR) technology. The company has recently seen a boom in bulk SMS services and is exploring ways of combining both.

“IVR has been a stand-alone product and SMS is seen primarily as a social tool, even though it’s been around for 16 years. In the last year, we have seen a big uptake in using it for business services,” said Mr Carpenter.

Chasing payments with a six cent SMS is cheaper than mail and becomes even more efficient when it includes the number for a 24/7 automated payment line.

“It reduces costs and improves cash collection. We have seen a lot of uptake among utility companies and it’s the kind of service we can sell abroad just as easily,” said Mr Carpenter. “For the first time in 22 years, we have a suite of products that will travel well.”