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VoIP Heads For The Mainstream

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Voip Heads For The Mainstream

March 26, 2004

By Erika Morphy

"Once consumers realize how easy it can be to make calls on an Internet broadband connection -- basically, all one has to do is install an adapter to make calls on a regular phone -- adoption will increase significantly," says Jon Arnold, telecommunications analyst with Frost & Sullivan.

For the most part, Voip has been a tool to help call-center managers deploy agents more efficiently at lower cost. Some brave businesses also have deployed this technology, but they are relatively few in number. Now, though, that is set to change, as AT&T has announced plans to accelerate and expand its Voip rollout for business users.

The timing is right, Pat Traynor, vice president of network integration for AT&T Business Services told NewsFactor. "I am seeing higher acceptance of this technology and -- as in the case of AT&T -- a higher quality of equipment and services."

Three Areas

AT&T has announced a threefold plan to push acceleration of networking enablement, equipment operability and voice applications for its Voip business line this year:
It has established interoperability arrangements for all five leading IP PBX equipment providers, adding Alcatel, Nortel and Siemens to its roster of partnerships with Avaya and Cisco.

It also plans to introduce a broader set of VoIP-enabled options across its managed data and virtual private networking portfolio. For example, AT&T will deliver an IP local service option for its managed services customers.
And finally, it will introduce three Voip applications for business operations -- IP Centrex, call center and teleworker solutions -- with trials beginning this summer.

Consumer Market

Clearly, providers such as AT&T -- and as we will see in a minute, Covad Communications -- are making their first play for the Voip market in business services. However, there are signs that consumers soon will be the next recipients of their efforts as acceptance and interest in this technology is moving into the mainstream faster than many expected even a short while ago.

Much of this is due to the providers that already offer Voip services to consumers -- Vonage and VoicePulse are two high profile start-ups in this space. However, as more consumers are becoming interested in Voip as a way to lower phone bills, they are likely to gravitate to the more mainstream providers.

"Once consumers realize how easy it can be to make calls on an Internet broadband -- basically, all one has to do is install an adapter to make calls on a regular phone -- adoption will increase significantly," Jon Arnold, telecommunications analyst with Frost & Sullivan, told NewsFactor.

Covad: Both Markets Are Exciting

DSL provider Covad Communications, for example, is eyeing both the business and the consumer Voip market. Earlier this month, the company signed an agreement to acquire GoBeam, a privately owned provider of Voip services, in an all-stock transaction valued at US$48 million. It is expected to close this May.

"Our strategy is to focus on the business market first," Stephen Lail, Covad vice president of voice deployment, told NewsFactor. "That is why we looked at GoBeam." Lail says that once the acquisition is complete, the company will augment GoBeam's capabilities and roll out Voip business services on its nationwide network.

Then, plans call for a consumer rollout in late 2004 or early 2005, he said.

The business market holds excellent revenue-building opportunities, Lail noted, "but the consumer market is where you can create volume."

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