ISP COALITION TO LAUNCH VOICE-OVER-IP
SERVICES IN 50 CITIES Initial Price Will Be 4.9 Cents Per
Minute, Plus $9.95 Monthly Charge
[All, Tell me... Did anyone not see this coming? The next step is for one of the larger (AOL/CSERVE) providers to announce all out participation for their memberships. Let's see how long that will take. Regards, Frank Coluccio]
August 20, 1998
VOICE TECHNOLOGY & SERVICES NEWS via
NewsEdge Corporation -- It will be years before IP-based
voice services win significant shares of the markets for
local and long distance voice calls. But that isn't
stopping companies from launching voice-over-IP (VoIP)
services.
Internet Global Services, a small Internet service provider
with headquarters in Dallas, is launching a VoIP network
called TelAres. The company is inviting other ISPs to
join the network, which will offer long distance service
across the United States. Internet Global Services says
the initial price for domestic long distance will be 4.9
cents a minute, if a customer pays a $9.95 monthly
charge for the service. If a customer opts to pay a
monthly charge of $2.95 for the service, the price per
minute is 6.9 cents.
Little Big Man
Internet Global Services may be small, but its plans are
big. The ISP offers Internet access in seven cities in
Texas, plus Denver, and it soon will sell services in
Seattle and Portland, Ore. Internet Global Services
expects TelAres service to be sold in 50 cities by
November, however.
"We see the TelAres network as a way for independent
ISPs to be competitive with larger organizations, such as
the AT&Ts [T], Sprints [FON] and MCIs [MCIC]," says
Nick Morgan, vice president of marketing at Internet
Global Services. "And we are positioning the service this
way in our marketing. We expect the AT&Ts, Sprints
and the MCIs to offer IP-based voice services in the
future, either through their ISP divisions or through their
traditional voice services divisions. This is a way for
small ISPs to get in on voice-over-IP early, to capture
market share before the large companies start offering
it."
Internet Global Services' ability to roll out TelAres in 50
markets will depend on whether other ISPs buy into the
service. The company only will be able to offer the
service in its 10 cities unless other ISPs agree to connect
their networks to the service.
Robert Castellano, an analyst at The Information
Network, a consultancy based in New Tripoli, Pa.,
believes Internet Global Services may have success
signing up ISPs for the service.
"The size of [Internet Global Services] shouldn't matter
to other ISPs, as long as they can prove they have the
technology to provide good, quality voice calls for a
reasonable price," Castellano says. "Something like this
could be enough to get the independent ISPs involved.
Individually, they might not have the money to put in a
[VoIP] gateway or a special server, but together, they
can afford to develop voice-over-IP services."
Michael Harris, president of the consul-tancy Kinetic
Strategies in Phoenix, agrees TelAres should have
appeal for independent ISPs.
"I think the big ISPs will develop their own voice-over-IP
solutions, " Harris says. "The small ISPs will have to find
a way to compete, or face losing revenue to the large
ISPs and possibly even losing Internet access customers
who want the bonus of voice-over-IP. For the small
guys, [TelAres] may be the way for them to get their feet
wet and not have to invest a lot in voice-over-IP."
What Does The VoIP Service Offer ISPs?
Internet Global Services has done a thorough job
developing its VoIP service. The company has won the
backing of Stockholm, Sweden- based Ericsson, which
will provide the gateway between the public switched
telephone network and the TelAres IP network.
The gateway, called Phone Doubler, can receive calls
from the PSTN, packetize them, and transmit them over
an IP network. The Phone Doubler also can receive
IP-based calls from PCs and transmit them out over the
PSTN. The device relays IP-based calls from one
segment of an IP network to another segment of an IP
network as well.
Ericsson's Phone Doubler actually is made up of three
components. One is a Gatekeeper, which performs user
authentication and collects data about calls for billing.
The second component is called the Gateway. It acts as
a bridge between the PSTN and IP connections. The last
component is the client software. Once installed on a PC,
it enables the computer to place and receive IP- based
calls using a headset, or a microphone and speakers.
A PC needs to have a 486DX2 66 MHz processor or
better to run the client software, and it needs to have
Windows 95, 98 or NT as its operating system. The
TelAres system also requires a full-duplex audio card
and a 28.8 Kbps modem.
"One of the nice things about our service is that you can
be surfing the Internet and make or receive a voice call at
the same time," Morgan says. "We compress the voice
call down to 14.4 Kbps. So if you are surfing the Web at
28.8 Kbps and a voice call comes into the PC, the data
service - your Internet access - is just cut back to
14.4 Kbps.
"This voice service may be very useful with ISDN [basic
rate interface service]," adds Morgan. "On an ISDN line,
the voice service still only takes up 14.4 Kbps. A
customer would have the rest of the 128 Kbps of
bandwidth for surfing the Internet. We hope not to
require a consumer to change their habits, whether they
are using ISDN or analog modems."
The TelAres network can transmit voice calls from PC to
PC, or from PC to phone. However, it also can send voice
calls from phone to phone. To accomplish this, a
TelAres customer simply would use a standard analog
phone to dial a phone number that connects to the
Phone Doubler gateway. The gateway would answer the
call and give the customer dialtone. The customer then
would dial a second number to reach the destination for
the call.
Under this scenario, the Phone Doubler would receive
the call as an analog transmission, packetize it, transmit it
over the IP network, and then depacketize the call to
place it back on the PSTN.
"We are offering phone-to-phone service because we
want TelAres to be as easy to use as possible," Morgan
says. "This service is targeted at consumers and small
businesses, and all of them may not have PCs. This
provides ISPs with a way to make revenue, even when
they run across these types of customers."
Internet Global Services will pay other ISPs $2.00 to $2.50
a month for each customer they sign up for TelAres
service. Internet Global Services provides the IP
backbone for TelAres, the Ericsson Phone Doublers, and
the accompanying customer service for TelAres.
Boosting Service Quality
One concern ISPs have with IP-based voice services is
that call quality has not been as good as standard
analog calls in testing. Internet Global Services has taken
a step to ensure good voice quality.
The company has built an IP backbone for TelAres that
is separate from the IP backbone it uses for its standard
Internet access services. This should improve voice
quality because voice calls will be mingled as little as
possible with regular IP data. When heavy traffic occurs
on an IP network, packets can be delayed, which causes
pauses in voice conversations.
"I don't think voice quality will be much of a problem,"
The Information Network's Castellano says. "The
technology for voice- over-IP has been around a while,
so companies like Internet Global Services have had time
to fine-tune it. The only thing to watch out for is what
happens once the service has a lot of customers. If
Internet Global Services upgrades its backbone to add
bandwidth, there shouldn't be any problems. But if the
company doesn't upgrade the backbone, then watch out
at 7:00 p.m., when everyone is using the network."
(Robert Castellano, The Information Network,
610/285-4548; Michael Harris, Kinetic Strategies,
602/598-9500; Nick Morgan, Internet Global Services,
972/221-1335.)
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