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Technology Stocks : Voice-on-the-net (VON), VoIP, Internet (IP) Telephony -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (1377)	9/25/1998 12:48:00 PM
From: Kenneth E. Phillipps	Respond to of 3178

Friday, September 25, 1998, 9:45 a.m. ET. IP Telephony Vision: Intelligent Phones By KATE GERWIG The promise of inexpensive international phone calls was not the driving force behind Sprint's five-city IP telephony trial last month. Rather, the real impetus was the long-term promise of turning today's telephones into intelligent devices that can handle voice calls along with Internet applications such as unified messaging. Ditto for AT&T and other traditional carriers trying to keep up with the VoIP competition coming from new providers such as Qwest Communications Inc. The long-term VoIP vision eventually could make voice over IP the higher-priced service, leaving the public switched telephone network (PSTN) as the economy service because of its singe-application approach, said John Heiman, Sprint's director of business development. "International calling isn't a sustainable driver because the trend is toward cost-based settlements anyway," Heiman said. "We're making investments in IP telephony for the long-term evolution of intelligent appliances." But before widespread VoIP services arrive, carriers say, the cost of IP gateways needs to come down, and industry interoperability standards must be in place. In addition, IP gateways need to communicate with the PSTN's Signaling System 7 (SS7) to route calls through either type of network. "There are a lot of software application features like call waiting and call forwarding that are enabled by SS7 that are just beginning to be available over IP," said Probe Research analyst Hilary Mine. "When you hit the early stages of feature parity, I think a lot more providers will introduce IP voice services." Qwest, for example, said it will add voice mail, speed dialing, calling card and audio conferencing services to its QTalk IP telephony service in the fourth quarter. Sprint plans to run its phone-to-phone IP trial until the end of the year, with no specific plans for a commercial service, Heiman said. "We're only at the beginning of the beginning of exploring this market," Heiman said, and added that today's IP gateways cost as much as $1,500 a port, compared with $100 for a PSTN-based port. Heidi Bersin, vice president of marketing at Clarent Corp., which supplies IP gateways to Sprint and AT&T, said port costs are high today because the technology is new and hasn't been widely deployed by providers. "Only about 1 percent of voice traffic is going over IP right now," she said. AT&T began offering VoIP services in three cities in May and has quietly started to call it a service rather than a trial. AT&T plans to expand its ConnectNSave service to four more cities by the end of the year and add more markets in 1999, according to Howard McNally, AT&T's vice president for transaction services. AT&T also runs a commercial VoIP service in Japan. Providers such as GTE and MCI WorldCom are testing VoIP gateways in their labs but have not started tests with customers. "We are not actively pursuing it until we feel the technology will work on a wider scale and we can offer value-added services with it," an MCI spokeswoman said. MCI is using PC-based VoIP services in its ClicktoConnect call-center application, where customers are able to connect directly to a customer service representative from a Web site.