Colt Carries VOIP to the Enterprise

Pan-European operator Colt Telecom Group plc (Nasdaq: COLT; London: CTM.L) has finally got around to offering an enterprise VOIP service (see Colt Launches Business VOIP).

After putting off the launch in February to spend more time on “innovation,” it has introduced Colt IP Voice, a managed IP centrex service available across its network of 13 countries. Although consumer VOIP services have been made available in Europe, the rollout of Europe-wide business services has been slower.

At the service launch, Colt excitedly showed off a flashy demo of its presence management features and Web-based administration tools including call forwarding, call transfer, parallel ringing, abbreviated dialing, and support for hot-desking and remote working, using both softphones and IP handsets. Colt also promises a simplified cost structure:

• A flat-rate pricing plan of €24.50 ($31.63) per user per month for calls to fixed lines within the 13-country network
• A range of competitive tariffs for calls to countries outside the network, mobile phones, and non-geographic numbers
• Calls made using either softphones or IP phones are available for €20 ($25.82) per user per month
• Installation charges vary according to the number of users, but would typically be around €20 ($25.82) per user

The network uses four Surpass hiE 9200 softswitches and 25 Surpass hiG 1600 media gateways from Siemens Communications Group to provide enterprise-level service features (see Colt Uses Siemens for VOIP). It seems Siemens has added IP centrex capabilities to the softswitch. In the past, it has had to partner with companies such as Sylantro Systems Corp. to provide the capabilities for network hosted services (see New Networks Beckon Vying Vendors).

“We think that the nature of the offering here will enable us to gain market share, especially against the incumbents,” says Tim Wort, Colt’s managing director in the U.K. “We’re not seeing this as cannibalization of existing revenue but as an opportunity” to attract new customers. It's a familiar refrain as carriers look to VOIP to recoup declining voice revenues and cut losses -- Colt reported a pre-tax loss of £114.6 million last year (see Colt Unveils Q4, Full Year Results).

By launching the service now, the operator is aiming to defend itself against a potential onslaught of business VOIP services. It’s taking the line of "if we don’t do it, someone else will," according to Don Robertson, Colt’s associate director. “We’re at the point now where voice over IP is becoming trusted,” he says. “Businesses are looking at IP now in a serious way.”

He adds that many businesses had replaced their PBXs in preparation for Y2K (remember that?), and since they tend to have a six- or seven-year lifespan, they're coming up for replacement again -- hence the attraction to the cost savings of VOIP.

CEO Jean-Yves Charlier told Reuters he expected the new service to start bringing in the cash in the second half of this year. According to Ovum Ltd., the VOIP market in Western Europe will be worth $1.4 billion by 2008, and Colt is targeting a share of between 8 and 10 percent.

The VOIP service is all part of Colt’s “Future in Focus” master plan touted in October (see COLT Posts Loss, Outlines Plans). It started by rolling out its COLT SecureIT IP management services, then introduced three new Ethernet services, and now, a VOIP service (see Colt Offers Ethernet VPNs).

— Nicole Willing, Reporter, Light Reading

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