US telecoms giant AT&T will trial a business voice over IP (VoIP) service in the UK, Australia, Hong Kong and Singapore, with plans to roll the service out commercially next year, the company said this week.
The trials, based on its CallVantage service, are the latest effort by a major traditional telco to attempt to keep up with a technology that poses a serious threat to conventional voice revenues, said analysts. BT this week announced that it would IP-enable its entire network in a move it hailed as futuristic but which some industry observers dismissed as playing catch-up.
The trials will begin in the third quarter of this year. AT&T is aiming the service at teleworking enterprise users, who will get advanced calling features, such as teleconferencing on any IP network, whether at home or on a hotel's WLAN.
"If the promise of IP can be harnessed with remotely-deployed employees and combined with a robust portfolio of VoIP-enabled networking solutions, it will positively influence a business' return on investment model," said AT&T senior vice president Cathy Martine. "This in turn should stimulate more demand."
VoIP is already in use by many businesses as a more flexible replacement for older PBXs, offering standardised equipment and allowing the incorporation of features, such as instant messaging and remote working. Smaller service providers can already offer CallVantage-style features to enterprises using equipment from Nortel, for example. VoIP has also made inroads into the consumer market, with US-based Vonage racking up 170,000 customers and Japan's Yahoo Broadband signing up five million. Free, consumer-oriented VoIP services such as Free World Dial and Skype count millions of additional users. In the meantime, telcos such as AT&T and BT, have seen their traditional revenue base of telephone-based voice minutes steadily decline, analysts said.
"Voice service providers could get caught in the crossfire between guerilla geeks and Internet brands," said James Enck, global telecom strategist with Daiwa Securities SMBC Europe, at this week's VON Europe VoIP conference in London. "As the Internet takes root, telephony declines."
CallVantage itself was launched this spring as a response to Vonage and is primarily a consumer service in the US. Features that will be carried over to the UK service include the ability to set up impromptu conference calls with up to ten participants, the ability to listen to voicemail on any phone or PC and forward messages via email, and PC integration for keeping track of calls and maintaining address books.
AT&T said any business voice service it offers will be VoIP-enabled, though it didn't say when this rollout would be complete. The company said it is the only VoIP provider with interoperability agreements with the five main networking equipment makers: Alcatel, Avaya, Cisco, Nortel and Siemens.
BT made similar noises at the launch of its "21st Century Network" (nicknamed 21CN) on Wednesday. BT will roll-out its comprehensive IP infrastructure starting next year, and complete it by 2009, when 99.6 percent of BT's customers will have access to the new infrastructure. The network will mean cost savings to BT of about £1 billion a year by 2009, BT said.
Not all industry observers were impressed though. Seymour Pierce analyst Jim McCafferty described BT's plan as "running to stand still". In a research note, he wrote: "We see this as evidence that BT needs to work hard at its cost base in order to offset its declining revenue stream."