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To: Johnny Canuck who wrote (16650)	6/19/1998 4:51:00 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69161

Internet Telephony Gets No Respect (06/16/98; 3:22 p.m. ET) By Andrew Craig, TechWeb Never mind the technological issues. Internet telephony's biggest problem is its image, and ISPs will have to offer more than just low call charges to attract customers, according to a new report titled Commercial Strategies for Internet Telephony. Most people associate IP telephony with poor quality and low reliability, so IP telephony companies must use advertising and other marketing methods to convince customers to sign up, says a report published Wednesday by Analysys, a Cambridge, England-based telecommunications consultancy. Several ISPs, including VocalTec and RSL/Delta Three, have already launched strong advertising campaigns. Some companies may not even want to brand their services as IP telephony because of its association with low quality, says the report. "Most of the existing Internet telephony service providers say they welcome the prospect of established telecom operators entering this market, because it will improve the credibility of the service," the report says. The Internet's reliability as a communications network is the problem, said Philip Lakelin, co-author of the report. "Because of the quality issue, a lot of people tend to see Internet-based networks as unreliable," he said. But in the long term, Analysys forecasts declining regular phone charges and an improvement in the quality of IP telephony. The key to selling Internet telephony will be through offering value-added packages that include videoconferencing, document-sharing, and call-center applications including banking and shopping. The United States represents the biggest opportunity for IP telephony, according to the report. The report forecasts the number of number of call minutes made from the U.S. to the United Kingdom using IP telephony will rise from 88.9 million in 1998 to 1.04 billion by 2003. However, in the U.K., where long distance and international call prices are already low, the potential IP telephony market is smaller. Call minutes from the U.K. to the U.S. using IP telephony will rise from 32.6 million to 292.1 million by 2003, Analysys forecasts. The Asia-Pacific region is also moving quickly toward Internet telephony, said Lakelin. Internet telephony is well-suited to countries such as Australia and Japan because "their [regular] call rates are high and they have a high volume of international call traffic," Lakelin said.