A look at .Tel’s 14 year, £25 million journey

Telnic has lost £25 million since it was founded — and much of that was before .tel even launched.

DotTelIt’s been a long and winding road for many new top level domain applicants. But most of the delays and challenges new TLD applicants have faced pale in comparison to the very long, very expensive road that .tel registry Telnic has traveled.

What is .tel?

.Tel is a unique sponsored top level domain.

A couple things make .tel particularly unique. First, you can’t host a web site on the domain. Your only option is to create a directory style site such as this. Second, the directory data is stored directly within the DNS.


Telnic’s genesis was in 1999. Telnic Limited, the company that currently runs .tel, was officially founded the next year.

The company applied for .tel in 2000 but the application was not approved by ICANN. It resubmitted its application in 2004 and finally inked a contract with ICANN in 2006. It then experienced further delays due to concerns about WHOIS policy conflicting with European Union and UK privacy laws.

It wasn’t until December 2008 that the company started its sunrise period. Landrush followed in February 2009 and the domain was finally made available to all registrants in March 2009.


Although it took a decade before the company was able to launch .tel, it was supported by investors that offered it $35 million in financing (as of 2008).

According to financials filed with the United Kingdom government, the company had cumulative losses of nearly £25M as of June 2012.

In the fiscal year ending June 2008, Telnic had an operating loss of £4.5M. It had already racked up close to £10.5M in losses over its lifetime. The following year, which concluded just a few months after general availability of .tel began, Telnic suffered a £4.1M operating loss. (Because most domain registries recognize revenue over the life of a domain registration, little revenue came in the door that year. It ended the 2009 fiscal year with £1.2M in deferred revenue.)

The company has yet to turn a profit.

Telnic Limited ended June 2012 with £6.0 million in cash. That’s a lot of cash to support a relatively small domain registry, and is likely much more than a number of new top level domain applicants are bringing to the table. Yet that sum was down from £9.7M the previous year. If annual cash outflows continued in 2013 at the same pace as in 2011 and 2012, Telnic’s cash balance will be around £3.0 at the end of this fiscal year (next month).

Telnames Limited, a wholly owned subsidiary that helps promote .tel, had £0.3M in cash at the end of June 2012. The subsidiary owed Telnic Limited £1.4M as of last June.


Will .tel be able to turn the corner? As of the end of 2012 it had 218,825 registered domains according to reports filed with ICANN. That number of domains alone isn’t enough to support the cash outlays it has made over the past couple years.

New TLD applicants can learn some lessons from .tel.

First and foremost, keep it lean until you’re close to revenue.

Second, a unique domain isn’t easy to sell.

.Tel is the most innovative type of domain around. It functions like an online directory page and uniquely stores data directly within the domain name system.

Yet that innovation has created challenges with domain registrars. Because registrants cannot create a web site on the domain names, it reduces the revenue registrars typically make by selling add-on services. Registrars also had to integrate systems for managing the content on .tel domains.

Perhaps for these reasons, Go Daddy doesn’t carry .tel. That’s important given the registrar’s dominance in the industry.

New TLD applicants should take note.

Numeric Only Domains Coming to .Tel

777.tel on its way.

Soon you’ll be able to register .tel domain names existing solely of two or more digits.

This week ICANN’s Board of Directors agreed to amend its registry agreement with Telnic to allow for the numeric domain names.

Telnic requested the change through the Registry Service Evaluation Policy (RSEP) process, which opened up the proposal to public comments.

Go Daddy filed comments opposed to Telnic’s plan. The registrar argued that the change was not a new “registry service” and was a “fundamental change” to .tel’s charter.

Go Daddy said that this change was unfair to another applicant that tried to get .tel, and thus the contract should be rebidded:

We believe that this request cannot be granted without requiring the rebidding of the .tel sTLD itself. It is unfair to other applicants and potential applicants to allow an sTLD to change its purpose after the
fact. Telnic’s promise not to allow numeric only second level registrations was a fundamental aspect of its application and, if we understand the decision correctly, a primary reason why .tel was awarded to Telnic and not Pulver (numeric only second level names were fundamental to Pulver’s application for .tel at the same time).

Although I’m not sure how much Go Daddy cared about .tel’s request (Go Daddy doesn’t offer .tel domain names), it appeared to be raising a red flag about other registries changing their plans:

We believe that certain other recent requests under the guise of the RSEP by sTLDs were also likely inappropriate for similar reasons and we are concerned about what appears to be a growing trend to misuse the RSEP. We hope our comments will encourage Staff and Board to review these requests more critically in the future.

Also on this week’s board agenda was to approve number-only .name domain names, but I cannot find a resolution on this topic. [Update: the board deferred on number-only .name domains.]

Telnic Wants to Release 1 and 2 Character .Tel Domain Names

Look for shorter .tel domain names soon.

.Tel registry Telnic has formally asked ICANN to allow it to offer one and two character .tel domain names. The company would not offer two letter domains that correspond to an existing country code, nor would it release one and two digit domain names.

Telnic wants to initially ask interested parties to respond to a request for proposal in order to obtain one of the domains. While other top level domain registries have used a similar process, it’s not clear what Telnic will be looking for given that .tel domain names can’t be “developed”, which was a key criteria in other releases. Perhaps they’ll want someone who plans to make a creative use of .tel. They’ll also look for big brands that will help get the word out about .tel. For example, they might wish to award HP the domain name HP.tel, while they’d prefer not to give me aa.tel (my initials) because they won’t get much marketing return for it.

After the RFP process, domains will be available at a premium price. Any domains not allocated during the premium phase will be available at regular prices.

.Tel Price Drop – $2.99 at eNom

eNom offers promotional pricing on domain.

.telIf you’ve been sitting on the sidelines for the .tel top level domain name, your patience may have been rewarded: eNom is now offering the domains for only $2.99 per year under promotional pricing.

.tel domain names don’t function like normal top level domains. Instead, it’s sort of like a business card on the web. You can upload content such as your contact information, links to other web sites, etc. on the domains. Recently functionality was added to insert Google Adsense ads onto the domains as well.

Will lower pricing spur demand for the domain? It’s hard to tell. The domain was launched a little over a year ago, so the TLD just experienced its first major drop cycle. As of the end of last year about 265,000 .tel domains were registered. And with hundreds of new TLDs coming onto the market in a couple years, competition is about to get much more fierce.

.Tel and .Asia By The Numbers

A look at end of year numbers for .tel and .asia.

With .tel recently going through its first annual renewal period, and Telnic’s official numbers for end-of-year 2009, I thought I’d compile some stats on the new top level domain.

Total number of .Tel domains registered as of 12/31/09: 263,304

Top 10 registrars of .Tel domains:

1. Name.com LLC 25,344
2. Mesh Digital Limited (DomainMonster) 24,984
3. Key-Systems GmbH 19,581
4. OVH Sarl 13,699
5. EuroDNS SA 13,606
6. Tucows, Inc. 12,211
7. Network Solutions Inc. 10,139
8. Cronon AG 9,206
9. Dotster 7,970
10. Gandi SAS 7,957

Net adds in second half of 2009: 49,239 (or about 8,200 a month)

Number of operational accredited registrars: 117
Number of registrars going through process to offer .Tel: 246

While we’re at it, let’s examine the numbers for .asia as it enters its third year.

Total number of .Asia domains registered as of 12/31/09: 219,949

Top 10 registrars of .Asia domains:

1. Go Daddy.com, Inc. 30,891
2. EuroDNS S.A. 28,781
3. Key-Systems GmbH 13,808
4. MarkMonitor 6,835
5. Mesh Digital Limited 6,716
6. Cronon AG Berlin Niederlassung Regensburg 6,625
7. Communigal Communications Ltd. 6,402
8. Melbourne IT, Ltd 6,313
9. Directi Internet Solutions Pvt. Ltd. d/b/a PublicDomainRegistry.com 6,136
10. Instra Corporation Pty Ltd. 5,339

(Note MarkMonitor, which is a corporate brand management firm. It looks like it registered close to 7,000 domains — perhaps defensively — for its clients.)

Net adds in second half of 2009: 3,482 (or about 600 a month)

Number of operational accredited registrars: 122
Number of registrars going through process to offer .Asia: 123