Here is a 3/13/98 news atricle on internet telephony
This should give you an idea of the potential revenues out there worldwide.
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Investors Are Ready To Talk Internet Telephony
(03/13/98
By Larry Dignan
A business call from New York to Paris through AT&T
costs about $1.87 a minute plus tax. Over the Internet, that
phone call could be as low as 25 cents a minute.
Problem-free international calls over the Net are a still few
months away from everyday corporate use, but already,
investors are willing to bet on the companies making it
happen.
Five public companies with a
presence in the Internet telephony application space: two
pure IP telephony players, VocalTec [VOCLF] and
NetSpeak [NSPK]; a hybrid, Inter-Tel [INTL]; and two
hardware companies, Natural MicroSystems [NMSS] and
Dialogic [DLGC]. With the exception of NetSpeak, their
stock prices peaked late last year, and more recently have
settled below 52-week highs.
What's driving these companies is a move from
traditional circuit-switched voice networks to IP networks
incorporating voice, video, and data. Internet telephony
got its start among hobbyists who called each other over
the Internet, and has evolved into a viable way for
corporations and long distance callers to save money.
Telecommunications carriers that fear being left behind by
the new technologies are also looking to upgrade to IP
networks.
Analysts liken the transition to IP networks to the PC
supplanting the mainframe. "Some look at IP telephony as
a niche," said Phil Leigh, an analyst with Raymond James
& Associates. "But I see a fundamental transformation to
IP telephony."
There's little doubt that the pie for IP telephony
companies will grow, but some niches are more attractive
than others. According to Leigh, Internet telephony
software product sales were only about $75 million in 1997,
a small part of the telecom market. Sales of equipment and
Internet telephony services, however, look better.
Bruce Carlsmith, an analyst with NationsBanc
Montgomery Securities, said $157 billion in calls could
move over IP networks in 1998, compared with $513
billion in calls on the public switched telephone network.
Sales of IP gateways will approach $500 million in 1998.
The Internet telephony market is expected to grow at least
100 percent annually over the next five years, and that's
why multibillion dollar companies such as Lucent
Technologies and Cisco want a crack at it. In addition,
several privately held start-ups are looking to get in on the
IP telephony boom.
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Grow 100% annually over the next 5 years.
Get the picture?
-DavidCG |
