Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Stephen B. Temple who wrote (34879)	6/16/1998 9:50:00 AM
From: Mark Jenkins	Respond to of 41046

Internet telephone success set to wound incumbents Reuters Story - June 16, 1998 09:36 %DE %TEL %GB %FR %US %ENT %ELC T DTEG.F BT.L FTE.PA VOCLF FON V%REUTER P%RTR By Neil Winton, Science and Technology Correspondent LONDON, June 16 (Reuters) - Making telephone calls over the Internet is getting cheaper and easier, and will soon provide profit-threatening competition to established big operators, a report published on Tuesday said. According to the report from Cambridge-based telecommunications strategy consultancy Analysys, telephone business across the Internet will take 36 percent of the international call market by 2003. Other conclusions from the report included - - Internet telephone traffic will overtake fixed network traffic by 2000. - Prices of Internet and fixed networks should converge within three to five years. - Low costs and an unregulated market are attracting new entrants. - Core revenues and profits of big telephone operators are at risk. But according to Philip Lakelin of Analysys, big operators like AT&T of the U.S., Deutsche Telekom AG , British Telecommunications Plc and France Telecom SA are not standing idly by as their traditional markets are attacked. The first reaction of big operators in the U.S. to upstart Internet telephone providers was to seek to ban them. The U.S. Federal Communications Commission wouldn't go along with that, so they are gearing up the technology to fire back at the appropriate moment, according to Lakelin, a co-author of the report. "Companies like Deutsche Telekom, France Telecom and BT won't be rolling out Internet telephony technology in their domestic markets until they have to. Currently they're trialing, keeping up with technological developments, then they will roll-out to face the competition," Lakelin told Reuters in an interview. "Many of them are already in it. ATT in particular is starting in its home market, and Asia Pacific. Deutsche Telekom with its 21 percent stake in VocalTec (Communications Ltd ) is already experimenting with new services, and Sonera of Finland, and Sprint (Corp ) in the U.S.," Lakelin said. Internet telephony has moved quickly from the limited and arcane ability to manipulate a personal computer to transmit phone calls to other personal computers, to an efficient and cheap competitor to traditional fixed phones. Now internet telephone providers can offer service to people who don't even own personal computers. <RSL Communications Ltd> announced in April that its Delta Three Inc subsidiary would expand into Europe, where high prices make cheaper telephone calls highly attractive. Delta Three offers subscribers a pre-paid card. The user dials Delta and enters a code. The call is dialled from a regular telephone which connects to a local Internet service provider using Internet telephony pioneer VocalTec's software. The service provider converts the voice into digital data packets which are sent across the world to the nearest Internet service provider to the destination city. The digital data is then converted back to analog voice and is delivered by the local phone network. According to Delta, this can mean significant cost savings. The standard cost of a call from the U.S. to Germany costs $1.36, but this is slashed to between 10 cents to 45 cents by the Internet phone. Analysys' Lakelin admits that quality of Internet telephony is not as high as for fixed lines. "The success depends on how much operators can convince users that the quality loss is acceptable compared with the price cuts offered," he said. " At least for the next two years there will a quality gap. But with mobile phones, people were willing to accept higher prices for mobility. There's no reason why they won't accept this compromise," Lakelin said. High cost Europe presents a tasty market. "For a very short time Europe presents an attractive market. But prices in Europe are falling because of deregulation, so the opportunity isn't going to last for a very long time. Three to five years at the most," Lakelin said.