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06/02/1998

New Low Cost Internet Telephony Services Challenge PTOs To Respond Finds IDC

LONDON, June 2, 1998 –1998 has finally seen the launch of commercial Internet telephony services in Europe by a number of ambitious next-generation telcos and Internet telephony service providers. According to new research from International Data Corporation (IDC), this has some of the incumbent PTOs briskly responding with plans to launch services of their own. The high level of interest is unsurprising given the potential of the technology both to allow new players to enter the market for basic telephony and also to enable new value-added applications utilizing the convergence of telephony with the Internet.

In the U.S., a number of next-generation telcos are already challenging the traditional PTOs with low cost Internet telephony services. In Europe, on the other hand, barely six months ago there had been little activity in the area of public IP telephony services beyond testing of the technology and one or two public trials by carriers such as Deutsche Telekom and Telecom Finland.

"The situation is now changing with a small number of commercial services up and running from next-generation telcos and ITSPs such as Delta Three, Glocalnet and POPTEL, while a number of ISPs are also planning to launch services within the next few months," said Scott Moore, Research Analyst, IDC's European Telecommunications Services. "However, the clearest signs yet of the adoption of Internet telephony in Europe have been the announcements by Deutsche Telekom, Swisscom, Telenor and Telia of the launch of IP telephony services before the end of 1998."

One of the most significant inhibiting factors to the introduction of Internet telephony services has been the issue of voice quality. However, advances in technology and the use of managed networks now enables operators to offer services with voice quality equal to that of GSM, allowing them to enter price-sensitive sectors of the residential market. On the other side of the equation there are a number of driving factors for IP telephony. At the moment the most important is cost, which will gradually disappear as the prices of IP and standard switched telephony converge. However, other drivers will soon emerge such as the possibility for new value-added applications.

IDC's Internet Telephony in Europe (#HT43EB) gives a broad overview of the developments in Internet telephony in Europe with details of trials and current or planned commercial services. It concentrates on the provision of public IP telephony and fax services over the Internet and managed IP backbones, with profiles of the activities of PTOs, next-generation telcos, ITSPs and ISPs in this emerging market. This bulletin is $595 and can be purchased by contacting your local IDC office.

About IDC

Headquartered in Framingham, Mass., International Data Corporation provides IT market research and consulting to more than 3,900 high-technology customers around the world. With a global network of 375 analysts in more than 40 countries, IDC is the industry's most comprehensive resource on worldwide IT markets, products, vendors, and geographies.

IDC/LINK, an IDC subsidiary, researches and analyzes the home computing market, leading-edge technologies in telecommunications and new media, and the convergence of computing and consumer electronics.

IDC's World Wide Web site (http://www.idc.com) contains additional company information and recent news releases, and offers full-text searching of recent research.

IDC is a division of International Data Group, the world's leading IT media, research and exposition company.

All product and company names may be trademarks or registered trademarks of their respective holders.

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