<You have done excellent work Hawaii and Mr. P$nk concedes that you know your stuff. Nevertheless, the valuation and the technology are still troublesome and the last mile issue....their costs will go through the roof.
mp >
Thank you for the compliment. you don't do too bad yourself. When I heard you had an interest in IDT I thought I should offer some intelligence here before a bad decision was made. IDT may, IMO be a good short in the future but right now is very dangerous. The raod show begins in a week. Then what I have been posting here will be widely known. Institutional buying has already started. There has been more block activity in the last week than the last 3 weeks combined. etc etc etc.
As for valuation. I remain convinced that IDT's corebusiness based on any reasoable multiple i.e. price/sales, price/book/ etc. would be in the low $20's. Now, seperate from that, considere they have: net2phone, (previously discussed), click2talk, click2 call. , ezsurf.com (their shopping portal recently released), neustravoz.com (their spanish portal recently released, net2dine.com (already over 11,000 restaurants signed up at $20 per month) their ISP (7th largest) , mystery switch, (a switch that IDT developed that deplys in 1/2 the time and at 1/6 the cost of Nortels) This swich is currently being deployed across IDT's entire network saving millions of dollars and will eventually be sold or spun off. I guess I could keep going but it is easy to see that this company is WAY undervalued.
As to the quality issues:
Here is a link and a recent artice from yesterdays interactive weekly. As you will see, VOIP has come mainstream. It is the next ecommerce internet craze and IDT is at the forefront of it both with name recognition, partners and deployed network:
Let's Talk - NOW!
By Fred Dawson, Contributing Editor
June 21, 1999 10:40 AM ET
While some service providers wait for Internet
telephony to deliver toll-quality service, Net voice
applications are developing just fine. The technology
isn't there to deliver the same quality service that the
regular public circuit-switched network offers, but
Internet Protocol telephony is now robust enough to
enable a growing number of enterprise and consumer
applications that are bringing voice to IP networks.
Recent quality gains through compression, latency
reduction and other techniques have triggered
wide-scale seeding of voice-enabling mechanisms in
Web browsers, chat rooms, e-commerce
applications, corporate virtual private networks and
other areas of online activity. The quick emergence of
IP telephony is setting the stage for a major
transformation in how people communicate over the
Web well in advance of any impact the technology will
have in helping to transform the circuit-switched public
network into a packetized environment.
"Once this technology achieves a presence on
everyone's desktop, you're going to see it used in a
much more immediate, spontaneous way than
before," says David Greenblatt, chief operating officer
of the Net2Phone division at IP telephony carrier IDT.
"It's really at the breakout point."
Net2Phone, client software that lets online users
place calls to any telephone, is on the verge of a
breakout of its own, thanks to a decision by Netscape
Communications to include the software in version 5.0
of the Communicator Web browser. Along with giving
millions of users ready access to the means of
making voice calls via their PCs, IDT has added a
chat-friendly component to Net2Phone that lets
participants in chat sessions talk to one another
without sacrificing their anonymity, Greenblatt says.
AT&T WorldNet also is helping to add voice to the
Web. Its new I M Here instant-messaging service is
based on PowWow, communications technology from
Tribal Voice that comes with a proprietary PC-to-PC
voice-over-IP component built in.
The availability of the voice option in PowWow has
become the leading reason WorldNet users download
the software, says Richard Dym, vice president of
marketing at Tribal Voice. "If you start from the
perspective of standard voice service, IP telephony
isn't comparable at this point," Dym says. "But if
you're coming from the perspective of adding voice to
text chat or e-mail, it looks pretty cool."
This realization is pushing providers of high-speed
data services in the cable industry to move ahead of
their colleagues on the cable telephony side into IP
voice. As the cable industry struggles to come up
with a platform that will meet the toll-quality and
feature-rich specs set for IP telephony-over-cable,
cable-owned high-speed data providers see an
immediate need to embed IP telephony into their
services.
"This is going to be the introductory year for voice on
the Web," says Charles Moldow, vice president of
@Media sales and marketing at Excite@Home, the
newly merged combination of Internet portal Excite
and cable data service provider At Home. "The
question for us is how involved we'll get to encourage
behavior that customers will be pursuing on their
own."
The company already is using PowWow client
software on its Excite portal, Dym says. He adds that
Tribal Voice is seeking partnerships with @Home
Network and other broadband service providers,
recognizing that IP telephony becomes much more
appealing as the bandwidth increases. "We're very
interested in getting into the broadband world," he
says.
They got game
Both Excite@Home and Road Runner, the
second-largest cable data service provider, are
exploring voice chat options in conjunction with their
use of the multiplayer gaming services supplied by
SegaSoft Networks. SegaSoft, which operates the
popular Heat.net multiplayer gaming network over the
Internet, has become the primary provider of
high-speed-enhanced multiplayer gaming for both
@Home Network and Road Runner.
The company is preparing to add IP voice to its chat
rooms, says Mike Zukerman, vice president of
business development at SegaSoft. "This is a natural
next step in the evolution of chat," he says.
Voice connectivity over IP also appears to be ready to
come into its own in e-commerce, where the ability of
a Web customer to talk to a service rep without
dialing in over a separate line or disconnecting from
the data link is seen as an important way to improve
sales performance. "There's a sense in the air that
this is something people are going to need to stay
ahead of the competition," says Cynthia Weiss,
manager for Internet solutions at Aspect
Telecommunications, a supplier of call-center
products to Fortune 500 companies.
Aspect offers an e-commerce product that includes a
voice gateway that allows IP voice traffic coming into
a call center to be translated to circuit-switched mode
for distribution over the call center's conventional
phones via the office private branch exchange (PBX),
Weiss says. With this approach, call-center agents
can receive the IP-originated calls through their
headsets in the usual fashion.
Aspect's new product line is based on a bundling of
the company's Web Agent software with the eBridge
Interactive Web Response system from eFusion. That
system connects consumers on the Internet with
call-center agents, providing Web users with
click-through access to obtain more information
through text chat, a call back over the circuit-switched
network or an IP voice conversation. Agents can get
on the phone and do whiteboard-type collaboration
with customers, helping them navigate the site and fill
out information forms, Weiss says.
Beyond mass-consumer applications, there's a major
push under way among service providers and vendors
to accommodate demand in the business sector for
applications that integrate voice with data over remote
office and telecommuting connections via high-speed
telephone and cable links. Most significantly,
improvements in the latency - or network delay -
imposed by the encryption, buffering and other
processes required to create a secure feed in virtual
private networks (VPNs) have made it possible to
extend the corporate PBX to the remote office using
IP voice gateways.
"The big issue for companies looking at this option is
uncertainty about the technology and whether
voice-over-IP meets their performance and security
requirements," says Chris Aronis, an analyst at
Strategic Networks, a Boston-based consultancy.
"The technology is right on the cusp of making this a
viable option."
Handling the overflow
Aronis estimates that a big company with several
branch offices interconnected via VPNs can reduce
telecom service costs by nearly one-third by putting
voice traffic on the VPN data feed and cutting back on
the use of conventional circuit-switched lines to the
point at which those lines are used strictly as backup
and to handle voice traffic overflow.
Cookie-cutter solutions are a long way off, but vendors
are working together across VPN and IP voice
gateway product categories to make it easier to put
together an application that suits a particular
enterprise's requirements, according to Susan
Scheer, senior marketing manager for VPN
applications at Cisco Systems. "Many of the service
providers we're working with plan to offer IP telephony
services over the VPN," she says.
One example of that kind of cooperation comes from
Clarent, a provider of IP voice gateway technology.
"What we find when we simply interconnect our
system with a VPN is that both systems must be
fine-tuned to bring the latency down to acceptable
levels," says Heidi Bersin, vice president of marketing
for IP voice at Clarent. "The voice packets have to be
encrypted along with everything else before going
through the router."
One of the companies working with Clarent, VPNet
Technologies, has put a lot of effort into trying to
accommodate voice requirements by reducing latency
in the encryption process. "VPNs require 20 [times]
to 100 times more processing per packet than other
[non-voice] applications, which takes you over the
latency requirements on the voice end," says Richard
Kagan, vice president of marketing at VPNet.
VPNet, which is an original equipment manufacturer
partner with ADC Kentrox, Nortel Networks and
others, has managed to cut its products' contribution
to latency to less than 3 milliseconds at each
location, with latency now typically averaging 1
millisecond, according to Kagan. "This allows service
providers to stay under the latency bar for IP voice if
they use [IP voice] gateway systems that fit our
criteria," he says.
Assured Digital, a maker of VPN switches and
terminals, also has joined the voice-over-VPN
movement. It recently introduced features that let
carriers plug delay-sensitive IP phone and fax
connections directly into the company's VPN
terminals. These boxes, which sit either at the edge
of networks alongside IP voice gateways or at the
customer premises, encrypt and assign the VPN
quality-of-service (QOS) parameters to IP voice
signals, according to Adrian Bisaz, Assured Digital's
vice president of marketing and sales.
"The security piece is as important, if not more so, for
voice as it is for data," Bisaz says. "We think this
barrier to voice-over-VPN is going to fall."
Meanwhile, AT&T is preparing to test "virtual call
center" technology that it developed in-house with an
unnamed call-center operator. The technology will be
used to link remotely located agents via cable
networks to applications running on the network at the
operator's headquarters. This will be the first use of IP
voice by AT&T over cable networks, coming well in
advance of the residential phone-line service the
company is preparing to introduce sometime next
year.
"Given that there are now these new high-quality
cable modems and the ability to deliver
voice-over-Internet connections, the whole notion of
how and where people work is going to change," says
Roy Weber, vice president for intelligent network
services research at AT&T Laboratories. "The same
technology we're applying in the virtual call center can
be used to support any number of remote-office
services that allow people to work from home while
accessing all the voice and data functions they're
accustomed to at the office."
AT&T's virtual call center will let companies station
their call-center reps at home or in other remote
locations separate from the main office without
changing the way their systems work, Weber says.
This means the reps access the same on-screen
information at their PCs and connect over the same
intra-office phone links that they would at the office.
AT&T sees call centers as an especially ripe target
for implementing the integrated voice and data
capabilities of its technology with the cable
connection, Weber says. "Companies are looking for
ways to accommodate the explosion in calling
volume," he adds, noting that 40 percent of the calls
AT&T handles now are toll-free-service calls.
"I don't think I've talked with a single provider of call
centers who isn't trying to figure out how to do this,"
Weber says.
AT&T hasn't chosen a supplier for the trial, but it is
demonstrating its remote call-center capabilities at
trade shows and customer sites using the cable
modem system supplied by Com21. The Com21
cable modem, which unlike other cable modems uses
Asynchronous Transfer Mode to support guaranteed
QOS parameters, is the only one now on the market
that can be used in the AT&T application, Weber
says.
While the cable industry has begun to focus on QOS
in conjunction with voice-over-IP in the development of
version 1.1 of the Data Over Cable Service Interface
Specification standard, most of the attention has been
on making it possible to offer first-line residential
service. But, says Bill Fenner, president and chief
executive of Com21, gains in IP voice technology
outside cable have put the industry in a position to
seize the initiative in the growing market for
telecommuting and other business applications,
where integration of voice and data with office-based
local area networks and PBXes is a major goal -
without waiting for the issues around first-line IP voice
to be resolved.
I will be commenting later on the last mile issue.
Wish everyone well over here.
IMO, if you are short this stock. Cover when you can and go long. Reconsider a short position later if you must but this stock could easily take off and not look back. |
