Europe has been the single biggest region for VOIP minutes growth this year, according to wholesale player ITXC Corp. (Nasdaq: ITXC). And recent evidence suggests that a number of other VOIP players have spotted the potential of the old continent (see GlobeTel Expands Into Europe, Vonage Raises $35M, and Level 3 Eyes Return to Euro VOIP).

ITXC's executive VP of sales, Steve Ott, says Europe's VOIP traffic has grown dramatically in the past year, and not just in Central and Eastern Europe, where increasing demand led the carrier to expand earlier this year (see ITXC Is Russian Around). "We put a POP [point of presence] in Germany in April, and the volume of traffic from there has surprised us," says Ott.

The ITXC man says the carrier is now carrying more than 1 billion minutes of VOIP traffic on its network globally each quarter, an increase of about 30 percent on a year ago.

But the big problem facing the likes of ITXC is the age-old issue of proprietary technology. "VOIP network interoperability is still a pipe dream," Ott told the FT World Telecommunications Conference in London today. "What we do have is interworking, which the session controllers that sit at the edge of IP networks are allowing. But they're not the magic bullet. There are still many problems to solve."

Despite such technical challenges, the VOIP sector is in growth mode (see RBOC VOIP Coming in 2004, Biz Users Fancy VOIP, Says BT and IDC: Euro VOIP Use On Rise), and that has attracted a number of traditional service providers to the sector. Following interest earlier in the year from IDT Corp. (NYSE: IDT) (see IDT Drops ITXC Bid), Teleglobe (NYSE, Toronto: BCE) stepped in and acquired ITXC (see TeleGlobe Gobbles Up ITXC).

— Ray Le Maistre, International Editor, Boardwatch