According to Andrew Light of Salomon Smith Barney, an investment bank, it made sense to focus on profitable point-to-point business and full-fare economy traffic, rather than boost market share with transfer passengers flying on cheap tickets.
At Cisco, our internal network traffic is nearly 70 percent video, driven largely by the high quality point-to-point video streams of our TelePresence video conferencing systems.
Point One can charge 10% to 15% less than existing long-distance companies to handle such traffic and still earn gross margins above the 20% to 30% generated by the big long-distance firms.