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Microcap & Penny Stocks : FRANKLIN TELECOM (FTEL) -- Ignore unavailable to you. Want to Upgrade?

To: Len Hannegan who wrote (23269)	12/15/1997 9:57:00 PM
From: Secret_Agent_Man	Respond to of 41046

Len, read the article more carefully.They are not competition. I reproduced the article below. YVONNE CHAN Telecommunications companies are gearing up to offer low-cost Internet telephony with the expected announcement of international simple re-sale (ISR) by the end of this month. ISR for voice would enable Hong Kong and international telecoms firms to re-sell space on leased lines bulk-purchased from Hongkong Telecom (HKT) at a greatly reduced price. That effectively would end HKT's monopoly on international direct dial (IDD) voice calls, as businesses and consumers could get high-quality voice service from an unlimited number of new operators. The expected announcement of ISR for voice comes as the Government endeavours to fulfil its obligation to the World Trade Organisation's (WTO) telecoms liberalisation agreement. The industry apparently foresees imminent licensing of ISR. According to an industry source, call-back operator City Telecom has bought 30 Internet servers from Northern Telecom division, Micron. AimQuest - a company that sells Internet-based services to Internet service providers (ISPs), telecoms and corporations - said it expected to launch private trials of Internet phone for SAR ISPs within the next two months. Other industry members, including fixed-telephone network service operators and foreign operators, also have set up Internet telephony infrastructures and have conducted secret test calls over the past few months. Hong Kong allows Internet telephony, but it is restricted to calls made over private leased lines, connecting a business to its related companies, such as its affiliates, subsidiaries or holding firms. Normal consumers are not allowed to subscribe to telecoms services which transmit voice in the form of Internet Protocol (IP) data packets. However, computer users can use their own software and microphone to place low-quality voice calls over the Internet from their homes. At the recent virtual private networks conference M. H. Au, senior assistant director (regulatory) of the Office of the Telecommunications Authority, told delegates that ISR for voice could be open to regulation. A Jardine Fleming Securities report predicted that ISR licences for voice would be issued during the first half of next year and "would quickly replace call-back as the preferred method of IDD arbitrage". However, the terms of HKT's exclusive licence explicitly forbid ISR and the company has said it wanted the issue resolved by the end of the year. Hong Kong, along with other leading markets in the region, has made commitments to the WTO earlier this year to open telecommunication markets to foreign competition. The SAR has promised to liberalise telecoms services and a range of international services, including call-back and ISR for fax and data. The WTO agreement comes into effect on January 1. If ISR for voice is allowed, HKT still would be considered to have a monopoly as the operators would have to lease lines from it. But HKT would collect only leased-line charges on Internet telephony while the operators would make a 30 per cent margin on the calls, based on an assumed 99 US cents per minute call rate to the US, the report said. ISR traffic now accounts for 24 per cent of IDD call minutes in Britain, with operators reaping 17 per cent of the country's IDD revenues. The quality of ISR connections to countries that allow them would be "indistinguishable from traditional IDD", the report said. ISR for voice is allowed in Australia, Canada, Britain, and the US. Technically, ISR calls can be made to any destination worldwide by first connecting it to the US where it would then be routed to a third country. Other Asian signatories to the WTO pact - including Taiwan and South Korea - also are expected to permit Internet telephony in the near future. The service is allowed in Singapore, but ISPs are not permitted to advertise it. "Within the next 12 months, we'll see the leading Asian players offering the service," predicted Chang Mun-kein, AimQuest Southeast Asia managing director. AimQuest offers worldwide points of presence to ISPs that want to sell global Internet roaming services to subscribers. It now plans to offer ISPs the capability to re-sell Internet telephony services to customers. The calls could be made and received without a computer, using standard handset phones. AimQuest is installing and testing Lucent Internet telephony servers that would switch voice into data packets that would be sent over the Internet. Mr Chang would not disclose the number or location of AimQuest's installed servers, but said several Hong Kong ISPs would be testing the hardware by early next year. He said it was up to the ISPs to work according to the telecommunications laws set in their respective countries. "We will not get involved in the regulatory issues," Mr Chang said. AimQuest's international Net telephony network is still in the development stage, but Mr Chang expects it to gain popularity once the regional telecoms markets are liberalised further. "We see a time when the Internet will become the network for [all] telephony. We predict that the ISP today will become the telco tomorrow." Internet provider HKNet already is close to Mr Chang's prediction. It launched call-back services in August, re-selling the services of Telegroup Hong Kong. Telegroup's parent company is the largest call-back operator in the US. In June, HKNet general manager Charles Mok told reporters: "We are actively working with a few leading Internet telephony vendors to further investigate their technology . . . IP telephone is a viable market for us." bg