Telecom IP phone trial leaves VocalTec in Limbo

Telecom is staying tight-lipped about its plans for Internet telephony, but VocalTec, the company with which it conducted a groundbreaking IP telephony trial, is unlikely to figure in them. Last year's trial, which saw Xtra using VocalTec's Internet telephony gateway, is acknowledged to have run into quality problems. The entry of major players into the market, and a clearer focus at Telecom on the best role for voice-over-IP in its strategy will probably see the Israeli-based pioneer out of the picture.

Telecom is staying tight-lipped about its plans for Internet telephony, but VocalTec, the company with which it conducted a groundbreaking IP telephony trial, is unlikely to figure in them.

Last year’s trial, which saw Xtra using VocalTec’s Internet telephony gateway, is acknowledged to have run into quality problems. The entry of major players into the market, and a clearer focus at Telecom on the best role for voice-over-IP in its strategy will probably see the Israeli-based pioneer out of the picture.

The trial did feed into a request for information, which Computerworld understands drew submissions from VocalTec, Cisco, Lucent, Ericsson, Ascend and others. Telecom spokesman Clive Litt says all the responses have been received and are being evaluated but he cannot give a time frame for any decision.

The trial was launched in January last year, under the reign of former Xtra general manager Chris Tyler, who predicted it would form the basis of a cheaper, less expensive service than Telecom’s current long distance offering and would be a "ubiquitous, universal service ... available to the consumer market, to business and to the government sector. The target market is basically the phone user.”

This is probably all out of the question now. The submissions are being handled by Telecom Networks rather than Telecom Internet Services, which runs Xtra, and the RFI itself focused more strongly on multi-party conferencing, Web-to-phone and PC-to-phone applications than on phone-to-phone IP telephony.

Telecom seems more likely to seek to compete conventionally on price with Internet telephony service providers such as Voyager, rather than join them in offering outbound distance calls over the Internet.

VocalTec’s local representative, Phil Talbot of On Q, acknowledges that “call quality wasn’t there” during the Xtra trial, but says it has improved since the trial concluded in August and is no longer an issue.

“The issue is more how a telco interfaces its existing investment in billing and provisioning systems and so forth. And strategically, why should a telco cut its own throat? What’s come out of it is that the value-added service business for a telephone company is really to focus not on phone-to-phone, but on PC-to-phone, Web-to-phone — in other words, a call button on a Web page linking to a call centre or telephone.

“Being able to actually terminate inbound PC-to-phone calls is important for them,” says Talbot. “They don’t want to offer outbound IP telephony, but they are interested in terminating the incoming calls, because there are a lot of service providers around the world who are going this way, and to be able to buy and sell IP minutes as well as PSTN [phone network] minutes is strategically important.”

Talbot says the role of VocalTec, 21% owned by Deutsche Telekom, is to “help the telephone companies understand the technology. If you look at why Deutsche bought into Vocaltec, they were really saying we need help into the next millenium.”

Talbot says VocalTec is now working with “a small number of large corporates who have their own data network throughout the country and see benefit initially in intra-company calls. We getting quite good success in the corporate market with gateways which are behind the PBX.”

He says that while VocalTec’s flagship I-Phone product will be company’s bread and butter for some time yet, the long-term focus is the service provider market, which includes new entrepreneurial start-up companies in competition with telcos, the telcos themselves, and the corporate market.

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