Telecom Firm Connects With Success in Russia

Fred Andresen remembers what it was like to make an international phone call from Russia back in November 1991.

“You had to order a call, but that might take hours and you could be cut off any time,” he says.

That was Andresen’s first business trip to Moscow--and that’s all he needed to test his idea.

When he got back in late 1991, Andresen called three of his friends from Miralite, a communications firm in Newport Beach. Together, they invested less than $100,000 (Andresen mortgaged his Corona del Mar house) to start up their new venture--providing long-distance and data transmission services to businesses in Russia. It took a year for their new company, Direct Net Telecommunications, to navigate the Russian bureaucracy and get a critical operating license and hook up with the federation’s satellite company.

Today, Direct Net has more than 100 customers, including the U.S. Embassy, Johnson & Johnson and Reebok. The company expects to gross $10.5 million this year, says Daniel Gee, Direct Net’s president.

What’s amazing is that Direct Net--which was recently named Small Business of the Year by the American Chamber of Commerce in Moscow--found success in an industry dominated by multinational giants. In fact, AT&T; and MCI are two of Direct Net’s customers.

Direct Net’s customers get a unique service. When they pick up the telephone in their offices in Moscow, they get a New York dial tone--the same one any business would get in New York City.

That means Direct Net customers in Moscow can call New York City by dialing just seven numbers, and they can phone other cities in the U.S. and around the globe by punching the same numbers any New Yorker would. (Direct Net’s office phone number in Moscow has a 212 area code.)

How does Direct Net do this? By tapping into a Russian satellite, operating satellite Earth stations in Russia and New Jersey, a gateway switch in New York City and digital equipment in Russia.

Gee attributes Direct Net’s success partly to the Overseas Private Investment Corp., a federal agency that provides political risk insurance and financing to U.S. companies in emerging markets. “Without the insurance, we couldn’t lease the equipment,” Gee said.

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Don Lee covers workplace and small-business issues for The Times. He can be reached at (714) 966-7407 and at don.lee@latimes.com.