VoIP Upstarts Set to Change the Old Guard of Telecom Giants
Cybertel Positioned to Take Advantage of That Growing Demand for Low Cost Telecommunications Service
LA JOLLA, Calif.--(BUSINESS WIRE)--April 3, 2000--Cybertel Communications Corporation (OTC BB: CYTP) CEO, Richard Mangiarelli believes that upstart Voice over IP (VoIP) companies are set to become the next telecom leaders in the shifting landscape of the telecommunications industry. The global voice-over-packet-switched service market should grow to $87 billion by 2004, according to Dataquest, Inc. (NYSE: ITB), a division of the Gartner Group (NYSE: IT). Cybertel is currently expanding its state-of-the-art national VoIP Internet telephony network, which will enable the company to route phone calls over the Internet at prices considerably less than nearly every major telecom giant.
"This industry is changing fast," says Richard Mangiarelli, CEO of Cybertel Communications. "It is all going to boil down to who can best take advantage of the newest and best technology. Telecommunications will be just like every other high-tech sector - survival of the fittest. Only the strong will survive and grow."
The major telcoms are already scrambling to catch up with the Voice over IP leaders. Last week, an AT&T (NYSE: T) led consortium finalized an agreement to invest $1.4 billion in Net2Phone (NASDAQ: NTOP), taking a 32 percent stake in the young VoIP company. Net2Phone currently handles roughly 40 percent of all phone calls routed over the Internet.
Some believe that VoIP companies will drive the price of long distance so low that established telcoms could no longer compete. David H.M. Baker CFA, president of Rivendell Capital Management, recently said in an article published on worldlyinvestor.com that, "Telecom upstarts will eventually overcome the established phone companies. Voice telecommunication ultimately is going to be free. Voice services will eventually be a loss leader for other services offered by these companies over their networks. This is a huge problem for the three leading long-distance companies AT&T (NYSE: T), Sprint (NYSE: FON) and MCI Worldcom (NASDAQ: WCOM), for whom consumer voice service is still a huge portion of revenues."
"Upstarts like Net2Phone, iBasis (Nasdaq: IBAS) and NetworkPlus (NASDAQ: NPLS) are embracing new technologies that will take advantage of the shifting paradigm and leave behind the larger, slow-moving players. I think this is going to be a huge issue especially as Voice-over-IP gets more traction in the marketplace," adds Baker.
"The VoIP industry is well positioned to redefine the telecommunications market with its ability to offer the same services and features that the giant telcos can, but at a highly reduced price," declares Mangiarelli. "It is this unique ability to easily adapt to customers needs that will eventually bring down the large lumbering telecoms. Customers today are not really that concerned about how their calls are carried. They know it is much more important that the calls are clear and reasonable priced. New VoIP upstarts will rise quickly and capture sizable portions of the customer markets with their ability to offer superior service at lower prices than the large telecos can offer. The telco giants can't help but take notice."
"The other issue here is that the incumbents' long-haul networks are considerably older and inferior to other emerging players like Level 3 (NASDAQ: LVLT), Global Crossing (NASDAQ: GBLX) or Qwest (NYSE: Q). This is a huge disadvantage, as the incumbents must pay to use the newer networks to remain competitive," adds Baker. "In even worse shape than the long-distance companies are the regional Bell operating companies, or RBOCs. Instead of embracing new technologies, the RBOCs have chosen instead to use their vast legal resources to slow down the onslaught of competitors, and use their control of the network to make it very difficult for others to provide services to their customers. All this has done is to slow down what should have been a more rapid adoption of these new services.
Cybertel is close to reaching its ultimate goal of being a Tier 1 telecommunications provider-serving customers all over America through its own VoIP network. The company expects to be offering switched VoIP service across America this year.
Cybertel is a La Jolla, California-based Voice over the Internet Telephony (VoIP) company in the process of building a state-of-the-art Internet Telephony network throughout the United States. Cybertel has recently signed contracts with other major carriers like MCI/Worldcom, Bell Atlantic Corp. (NYSE: BEL) and Level 3 Communications, which have made it possible for Cybertel to offer 1+ long distance, 1-800 numbers, regular and pre-paid calling cards and Internet access at some of the most competitive rates on the market today. Cybertel is a fully reporting company, listed on the OTC Bulletin Board under the symbol OTC BB: CYTP.
In the past, Cybertel has been a switchless carrier, acting as a wholesaler that buys long-distance capacity from large carriers and then resells that capacity to its customer base. Its customers' calls have been routed through other larger telecommunications companies' switches. The nation's largest traditional switched carriers include companies such as MCI/Worldcom, Sprint, AT&T, Global Crossing, Qwest (NASDAQ: QWST) and Williams Communications (NYSE: WCG). Companies offering VoIP related services include ITXC Corp (NASDAQ: IXTC) and VocalTec (NASDAQ: VOCL). |
