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To: djane who wrote (45908)5/2/1998 4:04:00 AM
From: djane  Read Replies (1) | Respond to of 61433
 
$8 Billion Market for IP Telephony Services Predicted

zilker.net

An $8 billion North American market by 2003 is the forecast for Internet service providers that offer
IP telephony services, including voice, fax and video, according to a study made by Killen &
Associates, a telecommunications research and consultant group in Palo Alto, Calif.

"ISPs have an opportunity to generate new revenues by becoming IP telephony service providers to
their corporate and residential customers," said Michael Killen, president of the company.
"Businesses are easily motivated by the prospect of reducing their telecommunications expenses by
as much as 50 percent. IP telephony services will not be a 'hard sell' for ISPs as the technology
improves over the next few years."

According to the 160-page study, "Internet Protocol (IP) Telephony: New Markets for Systems and
Service Providers," some suppliers of voice over IP systems, such as Lucent Technologies, have
built "fallback" features into their systems. When a voice-over-Internet call cannot be completed or is
interrupted, the call is rerouted through the Public Switched Telephone Network (PSTN). This
feature makes it possible for an ISP to guarantee an acceptable level of service to its customers
while still offering long distance rates 50 percent below the norm.

"Businesses will not settle for inconsistent and unreliable long distance service comparable to the
Internet access offered by ISPs today," said Killen. "A fallback feature to the PSTN is a band-aid
until the Internet infrastructure and quality of service improves. In addition to the cost savings on
standard telecommunications services, we will begin to see new services developed and embraced
as a result of the greater efficiency of Internet Protocol transmissions.

"All ISPs - large and small - must consider a plan to offer IP telephony services to their customers.
Those who rule it out or delay too long will soon regret their decision."

For information on the report contact www.killen.com or 650-617-6130.

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