Noise over IP Telephony Not Always Where Money Is

VENICE, ITALY (03/20/2000) - There are now many applications of IP (Internet Protocol) telephony -- but the ones making the most noise are rarely those seeing most use.

"There's a big difference between where there's publicity around IP telephony and where the minutes of use are," said Heidi Bersin, senior vice president of corporate marketing at Clarent Corp., speaking here at the International Data Corp. (IDC) European Telecoms Forum 2000 today.

"There's a lot of use in international (carrier services) but it's usually not really spoken about. On the other hand, some enhanced services over voice over IP have a lot of publicity, but there isn't very much happening right now," Bersin said.

A major obstacle to the widespread adoption of IP telephony services has been usability, said Andrin Bachmann, executive vice president of Swedish long distance carrier Glocalnet, in the same conference session.

Bachmann drew a parallel with the experience of a conventional telephony carrier. The U.S. company MCI, he said, took 20 years to build a 4 percent share of the long distance market by using a two-stage dialling process: customers would dial a toll-free number, then an access code, followed by the number they wanted to reach. Soon after switching to a single-stage system, its market share soared to 20 percent.

Nerd-to-nerd telephony, as Bachmann described the state of the PC-to-PC IP telephony market in 1995, quickly gave way to PC-to-phone and calling-card services through 1996 to 1998. Last year, he said, his company was the first to launch a single-stage dialling long-distance service based on IP for users throughout Sweden -- but many of the customers didn't realize they were using IP telephony.

Such low-key applications don't interest Elise Bauer, Firetalk Communications' senior vice president of corporate development and strategy.

"That's just processing a regular telephony call over a cheaper medium. We are more interested in what you can do with voice in this new medium," Bauer said.

In addition to simply talking, Firetalk users can use the Web-based interface to set up point-and-click conferences, host guided tours of a Web site, or find out whether someone was available to speak before placing a call.

"There are extremely low barriers to growth in voice over the Net, compared to the telephone," she said, adding that an off-the-shelf US$3,000 computer can support thousands of users, putting the hardware cost close to $1 per port, while users need only add a $5 microphone to their computer.

"The key advantages of telephones for now are ubiquity, quality and portability -- but we'll see how long those advantages last," Bauer said.

IDC's European Telecoms Forum 2000, in Venice, Italy, continues through tomorrow.

IDC is a subsidiary of International Data Group, the parent company of the IDG News Service.

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