Wholesale Channel - Broadband VoIP: All Done but the Deal-Making

Posted: 09/2001

Wholesale Channel

Broadband VoIP: All Done but the Deal-Making
By Scott Summerill

Broadband providers can add the sweet spot of voice services to their
offering with almost no capital investment. The technology is ready. The
wholesalers are lining up with products. Now it’s up to resellers to cut the
deals.

Wholesaler Voicenet Communications Inc. for example, announced in June
availability of its private-labeled broadband voice solution for providers.
While it has yet to sign on any provider customers, Voicenet vice president of
marketing Matt Aigeldinger says the company is in trials with two cable
providers.

Voicenet’s offering aims to give broadband providers and OEMs the ability to
deliver second-line voice services to residential and small-business customers.
The company’s services, which it says can be turned up almost overnight, feature
a web-based services manager and virtual telephone number technology that allows
end users to establish local presence in almost any U.S. city over cable, DSL,
T1 and frame relay connections.

Voicenet employs the Cisco Systems Inc. ATA 186 gateway device to connect via
Ethernet to the broadband network. A CPE device allows the connection of two
analog phones.

"With that, we can enable anyone with a broadband connection–DSL,
cable, T1 or whatever," Aigeldinger says. "We are able to give them a
telephone number, not only in the city they are in, but we’re able to provide
numbers in about 250 cities across the United States that can ring to that
connection."

Image: Voicenet Communications
Inc.’s private-label broadband voice solution became available in June.

That virtual telephone number means a single subscriber can have a local
number in his home city, as well as local numbers in San Francisco and Chicago,
all of which will ring through to the same phone.

"It can make you look a little larger than you are," Aigeldinger
says. "It’s also good for customer service. Rather than giving a good
customer an 800 number that goes into a call center, I can give them a local
number that will ring right to my [CPE]. The advantage is a local call for my
customer, and it’s zero cents per minute for me."

The company also offers an automated telephone manager with the service. The
manager, like the other services, can be branded with the provider’s private
label.

"People can go to the site and turn on their voice mail, do their call
forwarding and see all their call records," Aigeldinger says.
"Anything that has to do with the digital telephone service, they manage it
totally over the web."

Voicenet hosts all its applications. That allows providers to turn up
services quickly and with almost no capital investment, Aigeldinger says.
"Broadband providers are looking for ways to generate additional revenue
per subscriber," he says. "They’re looking for ways to get into the
voice market without having to purchase an expensive switch. We’re offering a
turnkey solution. Overnight they are in the voice business and offering their
customers a phone number."

The company offers its services on a wholesale, private-label basis. But
Aigeldinger says the company does have a small base of retail customers.
"Our target customers are the cable providers, the DSL providers and the
ISPs. The fastest way to get this to market is to go after the broadband
providers that have the marketing muscle and the customer base."

Pagoo Inc. offers a similar service to broadband providers, called Broadband
Voice Express. Like the Voicenet offering, Pagoo requires CPE that allows users
to use a standard phone to connect to their broadband network.

The company also allows end users to sign up for a local phone number or a
number for a different city, or any combination. Standard features, such as
caller ID, call waiting and forwarding, and voice mail, are part of the feature
set broadband providers can offer their customers, as well as lower
long-distance costs and web-based self- provisioning and management.

With Pagoo, providers can choose whether to license the services and bring
them in house, or have Pagoo host the branded services.

Sylvain Dufour, CTO and co-founder of Pagoo, says, "It’s similar to
other [packet-based telephone services] in terms of technology because it uses
voice over IP, but the target is quite different. You connect the box into your
broadband line ahead of the modem, plug in your regular phone, go to [your
provider’s] website and say ‘I want to get phone services.’"

Net2Phone Inc. also enables broadband providers with VoIP services under a
hosted or licensed model. The company’s Broadband Voice Solutions offers several
customizable packages that include end-to-end IP telephony service and a
wholesale VoIP minutes program.

Bryan Weiner, Net2Phone’s general manager of communications services, says
that while the quality of PC-to-phone services is improving and starting to take
off, "You are also seeing devices that plug in to PCs."

This trend, Weiner says, will continue to grow as broadband proliferates. The
high-speed connectivity allows devices to plug directly into the modem, DSL or
cable, and accepts a standard analog phone. That allows users to make calls over
their broadband connection completely independent of their computer.

"One of the issues of PC-to-phone is that it is running through the
Windows operating system, which introduces delays and quality issues,"
Weiner says. "That has nothing to do with the phone call, it has to do with
the operating system not being designed for making phone calls."

While the upcoming release of the Windows XP operating system is supposed to
address those issues, Weiner says broadband voice services will grow independent
of the desktop computer.

"I believe the future of this is devices connected to either your ISP or
your broadband connection," he says. "It’s not the PC itself. People
like to use their phone, and if you can allow people to use their regular phone,
their behavior is unchanged and it allows you to get into the home and bypasses
the RBOC. I believe the future of voice into the home is broadband."

Adoption of this technology, while on the rise, has not set the market on
fire. Network and equipment interoperability, QoS and availability of high-speed
connectivity have held the deployment of such services to a minimum. But Weiner
says that will change very soon.

"It sounds very future, very distant, but it’s not really that far
away," he says. "The technology is really here, what needs to happen
are the deals and the penetration of broadband into the home. About 80 percent
of the infrastructure issues are done. The issue now is how to create mass
distribution into the home."