U.S., Korean Joint Venture to Push VoIP

BANGALORE, INDIA (05/17/2000) - In a deal that will help push its voice-over-Internet Protocol (VoIP) technology into Asian markets, San Jose, California-based empowerTel Networks Inc. is setting up a joint venture with LG Soft India Pvt. Ltd., a subsidiary of Seoul-based LG Electronics Inc.

The deal will likely give empowerTel access to the Korean telecommunications market as well as the LG brand and marketing muscle. It will also fuel the San Jose company's efforts to develop end-to-end applications that integrate VoIP networks with circuit-switched, public-switched telephone networks (PSTNs). The joint venture, called LG empowerTel Pvt Ltd, will be majority owned by empowerTel.

EmpowerTel offers carriers an open architecture that enables the deployment of value-added services on their switching platform, according to the company.

"Most consumers will continue to access the Internet through PSTN connections for many years to come, and successful VoIP solutions must accommodate that reality," said Ajit Medhekar, chief executive officer and chairman of empowerTel Networks. "LG has a range of products that allow us to get out essentially to the end user in a lot of ways, plus some enterprise level applications, while we have the core convergence switching strategy."

The new company, LG empowerTel Pvt. Ltd., to be based in Bangalore, is being set up with an investment of US$2 million, and will integrate empowerTel's USX1000 carrier-class VoIP switching system with LG's PSTN switches and new LG terminal VoIP technology.

LG has conventional switches, and a variety of terminal equipment such as IP phones, VoIP routers, and gateways, said Lalit Ahuja, president and managing director of LG Soft. "If we put them all together with empowerTel's carrier-class solution, we will be able to offer an end-to-end VoIP solution."

IP phones, VoIP routers, and gateways are under various stages of development and commercialization by LG Electronics and LG Information & Communications Ltd., which also offers conventional switches. Besides integrating empowerTel and LG equipment, the joint venture may also integrate down the line technologies and products from other vendors, added Medhekar.

Although both LG and empowerTel plan to market worldwide the integrated VoIP product to be developed by the joint venture in India, an immediate opportunity for both companies is the LG Group's own carrier companies such as LG Telecom Ltd., which offers mobile telephony PCS (personal communications services), and Dacom Corp., which offers local and long distance fixed-line telephony services and ISP services in Korea.

EmpowerTel, said Raj Saksena, the company's vice president and chief technology officer, is also likely to be working on joint development of VoIP technology with Sony Corp., which is an investor in the company. Sony is expected to bring in consumer-end VoIP technology that it is developing.

EmpowerTel Networks in San Jose can be reached at +1-408-519-4500 or http://www.empowertel.com. LG Soft India can be reached at +91-80-527-5711 or http://www.lg-soft.com.

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