Telco start-up Greydot Telecom has gone live with its voice and fax services that enable small and medium enterprises to earn an income by making and receiving calls over the Internet.
Greydot Telecom provides a voice over Internet protocol (VOIP) service where customers act as independent business owners.
This means subscribers can earn a portion of the profits made from making and receiving calls, with no upfront capital investment, according to the company.
Greydot Telecom CTO and director Juri Nysschen explains the service is incentive-based; meaning if a subscriber refers another person to also subscribe to the service, both parties earn a percentage of the profit from their calls.
Nysschen says Greydot Telecom will plough 40% of its profit back into its affiliate structure. He adds that the more customer referrals a subscriber makes, the more money the subscriber can earn.
The company says the model works by giving the first person who initiates a call 10% of the profit of that call. Every other person that the first person signed to use the service each receives 10% of the amount the first person got paid.
What's the difference?
A pyramid scheme is a business model that involves promising participants payment, services or ideals, primarily for enrolling other people into the scheme or training them to take part, rather than supplying any real investment or sale of products or services to the public.
Nysschen says Greydot Telecom's referral network differs from a pyramid scheme because payment at sign-up is not a prerequisite to participation. People can join as a free customer and receive access to limited services.
“Our referral network is a means to reward customers for making use of our services, their loyalty for remaining customers and for referring others to make use of our services. In that respect, it differs very little from a loyalty programme for free flights or discounts at retailers.
“The difference to our programme is that we reward in currency, thereby not restricting the participant in the method by which he may claim his reward,” he says.
“Unlike a pyramid scheme, everyone is paid a fair share of the reward, with the larger share going to the person closest to the profit generating event.”
Greydot Telecom currently uses Telkom infrastructure; however, Nysschen says the telco expects to expand to other operators in other countries.
The company provides a monthly subscription service for R39. The subscriber receives a communications connection to make VOIP calls on the Web and receive calls from anywhere in the world to anywhere using their microphone and PC, laptop, notebook or tablet device.
He states Greydot Telecom's rates formula works by charging wholesale per second prices plus 10c per second with one minute as a minimum termination fee.
Hard work
“The issue here, as with most such schemes, is that the early entrants benefit the most, and subsequent members of their 'downline', as it's known in MLM [multi-level marketing], will earn progressively less the further down the line they are.
“The problem is that later entrants, being low in the downline, will have to work exceptionally hard to earn viable revenues from the scheme.
“The biggest myth of MLM is that it's a passive income: you, in fact, have to be very active to make it work, and the later you enter, the more active you have to be. The bottom line for those interested in it is: don't give up your day job.”
Other choices
Greydot is not the first telco to use a referral marketing strategy.
Vox Telecoms' Telepreneur also works on a referral marketing strategy and enables entrepreneurs to resell Vox products and recruit more telepreneurs to also sell products.
The system, similar to Greydot, uses a dealer network and focuses and selling products to the consumer and small and medium enterprise space.
Vox Telepreneur has more than 11 000 customers and 4 000 dealers added to its network since its inception in 2008.
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