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November 28, 2007 at 4:54 PM

Startup Sotto partners up with established XO

A little more than a year ago, I wrote a story about Bellevue-based Sotto Wireless, a startup founded by three experienced executives coming out of AT&T Wireless.

The business revolves around simplifying telecommunications for small- to medium-size businesses by selling them one service they can use outdoors on the cellular network and indoors on Wi-Fi. It eliminates multiple bills, phone numbers and voicemail boxes.

A year later, Rod Nelson says the company is in the thick of it, having launched services in Charlotte, N.C., and in Seattle.

Today, it announced it is partnering with XO Communications in Seattle. Sotto will bundle XO’s broadband services with its offerings to small-and-medium-sized business, and XO has agreed to resell Sotto’s services.

Sotto falls into the highly talked about wireless sector called “fixed mobile convergence,” or FMC for short. FMC mixes both the luxuries of landlines with the flexibility of wireless phones.

For instance, someone calling an employee using one of the Sotto phones will have no idea if he is reaching that person in the office or on a mobile phone. Phone calls can be transferred between employees, and all voicemail goes into one inbox.

When the employee is in the office, the phone operates over Wi-Fi, saving minutes on the company’s cellular plans, but then it automatically switches over to cellular when the person leaves the office, Nelson said.

He added that the increased attention and focus on FMC has helped the business in the past year. T-Mobile USA started offering a service called T-Mobile Hotspot@Home in that time. That service allows consumers to use a Wi-Fi network in the house for better indoor coverage and to save money.

At the minimum, Nelson said efforts such as those are encouraging more handset manufacturers to include Wi-Fi in phones. Right now, Sotto Wireless resells Nokia handsets, but in the next year he expects to start offering Windows Mobile and other smartphones.

Paul Merritt, general manager of XO in Seattle, said the partnership places XO six months to a year ahead of its competition. He doesn’t know of any of his competitors that are reselling cellular services. Because of this, he’s allowed all of his 12 sales reps to offer the service to new and existing customers.

“It was a natural fit, there’s nothing close to this on the market,” he said.

Nelson said if the trial goes well in Seattle, it will eventually will roll out to the 75 markets that XO serves around the country.

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