FOTE: VOIP, Video & Carlsberg
The keynote action was fast and furious, as were the panel sessions (see NTL's NGN Hell and Dodd's Recipe for Recovery). Attendees, gathering in the Olympia Centre in London’s West End, also snacked on sausages, salmon, and beer and let fly some juicy rumors -- but more on that later (yes, you'll have to read the whole thing).
VOIP was a subject near and dear to everyone's hearts. The big questions: how to fund it, bake it, and sell it. One big opportunity on everybody’s plate is enterprise VOIP services.
”IP telephony will exceed the legacy PBX market by 2006,” predicted John Blake, head of hosted IP telephony with . He pointed out that BT is investing roughly $5 billion in next-generation IP voice products
And Blake says the revenue is starting to come in for hosted IP voice. “There are significant deals this year.” He says the leading PBX vendors, including , Avaya Inc. (NYSE: AV), and , are scaling back investment in legacy PBX products and going to all-IP because they see the enterprise VOIP market in the early stages of strong growth.
What is one of the big barriers to enterprise VOIP? The fact that IP handsets are still largely “proprietary” and cost $300, said Blake. “The price of IP handsets has got to come down.”
Can the move to IP services happen fast enough? As Dr. James Dodd, managing director of Anthem Corporate Finance and vice chairman of data service provider ETT, said in his keynote address on Tuesday, the move to IP is basically a race against the clock before traditional voice revenue is vaporized (see Dodd's Recipe for Recovery).
From a user standpoint, however, the VOIP game might be a little different. Carsten Rossenhövel, managing director of the European Advanced Networking Test Center AG (EANTC), says services providers have a huge challenge ahead in convincing users that VOIP is “safe.” ”Customers really ask, ‘Is this something I can trust?’ ” said Rossenhövel in a panel on VOIP services. “The customers expect this to run as well as the PSTN and everything will become cheaper… This is a real problem.”
Video in demand
In a session on triple-play, Transmode's Jon Baldry, technical marketing manager, referred to the BBC announcement, noting that the content providers have to be the big drivers of IP video: “The BBC and other content providers need to push this, rather than the service providers."
Both Crossey and Redback Networks Inc. (Nasdaq: RBAK) director of corporate marketing, Young-Sae Song, see a wider range of interactive content as a key to kicking up the competitive edge of telcos on the video front.
”It’s not just how to offer cable and VOIP service,” sang Song. "It’s how to make it more interactive and easier to use."
Meanwhile, in the conference exhibition, Redback’s staff looked to be pretty excited about prospects in Europe. Song pointed to his company's success in BT's 21CN project -- reported exclusively by Light Reading -- as well as to contracts with other big providers such as and (see Alcatel Names Its 21CN Partners and Redback's SmartEdge Perks Up ).
In fact, if we were putting money on it, Redback should announce another Euro PTT customer shortly. Song kind of confirmed it, saying to stay tuned and to expect more customer announcements soon.
Light Reading’s staff will of course, be working to fill out some of the biggest scoops, but plenty of nuggets of information were dropped between bottles of Carlsberg here during the cocktail hour on Tuesday night.
For example, Tpack A/S CEO, Peter Viereck, wonders if we might see a lot more consolidation on the Sonet MSPP provider front, where there are literally dozens of providers. He’d be the one to ask about it, as Tpack, a small Danish company, licenses technology to “almost all” of the Sonet MSPP players, according to Viereck. One of its big customers is Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA), where Viereck served as CEO of Tellabs Denmark before he left and a large chunk of his unit was laid off(see Headcount: Mama Mia!). Viereck informs us that Tellabs owns 12 percent of TPack (who knew?). Who might be reconsidering their Sonet strategy? Well, Viereck names as a prime candidate for either consolidation or product rationalization. According to him, the Metropolis, Lucent’s European SDH platform, has been selling like hotcakes -- but its DMX, the Sonet platform targeting the North American market, has struggled to gain any ground against Fujitsu Ltd. (Tokyo: 6702; London: FUJ), which is regarded to hold the lead position at the biggest incumbent carriers. He wonders why Lucent doesn’t combine its Sonet and SDH platforms into the same product line, as most of its competitors have.
Viereck also says that Lucent and “aren’t done cutting.” And he adds that, well, you should expect such incumbents to continue playing the M&A dance.
Anything else, Peter? Tell us what’s really on your mind…
— R. Scott Raynovich, US Editor, Light Reading