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XConnect Takes Out Pulver's IPeerX

Light Reading
News Analysis
Light Reading
9/12/2006
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The VOIP peering company XConnect Global Networks Ltd. announced Tuesday its acquisition of VOIP pioneer Jeff Pulver's peering company IPeerX.

The terms of the deal were not disclosed; the companies are saying only that both cash and stock changed hands.

IPeerX was originally the carrier peering portion of the Pulver.com Free World Dialup VOIP service, but was later spun off into a seperate business. (See Peering Spreads the IP Gospel.)

The deal promises to make XConnect one of the largest VOIP peering services in the world -- if not the largest -- and will give the U.K.-based company a stronger presence among North American carriers, sources say. It gives the Pulver People a handy payoff for their work peering more than 100 VOIP providers with the Free World Dialup service since 2003. (See Pulver Puffery.)

XConnect COO Natan Tiefenbrun says his company currently serves about 300 peering customers. Roughly 140 new customers will be added to that number when the IPeerX acquisition is complete, he says.

Tiefenbrun says the IPeerX acquisition will establish XConnect as the largest Electronic Numbering (ENUM) registry service in the world, ahead of rivals Neustar Inc. (NYSE: NSR) and VeriSign Inc. (Nasdaq: VRSN). Before the addition of IPeerX, the XConnect database contained about 5 million VOIP phone numbers. The IPeerX database adds another 4.5 million numbers, Tiefenbrun says. (See VOIP Peering Bypasses KPN.)

ENUM is a protocol for creating a domain name from a telephone number and associating it with an Internet address. ENUM databases allow member carriers to directly connect calls to and from VOIP subscribers on other member carriers' networks. Such calls are called "on-net" and cost far less to complete than those that must flow over the PSTN. (See Peering Spreads the IP Gospel.)

XConnect charges its provider members €1 per phone number per year to list VOIP numbers in its ENUM registry.

Aside from the ENUM service, XConnect provides signaling/interconnection, security, and billing support services to its member companies, the company says. Roughly 200 XConnect customers take advantage of some or all of those non-ENUM services, according to Tiefenbrun.

"VoIP peering will drive the adoption of the new generation of IP communications including video, voice and messaging,” Pulver.com founder and chairman Jeff Pulver said in a statement Tuesday. “The success of VoIP Peering depends on having a sufficiently large community of service providers -- this deal creates an industry player with the critical mass to succeed.”

Pulver did not respond to requests for further comment Monday.

“I think this establishes us as the leader,” Tiefenbrun says. “But it should be said that VOIP peering is still a nascent market, and just because we are the biggest now doesn’t mean we’ve hit critical mass yet.”

Heavy Reading analyst Jon Longo sees the move as part of a trend. “That’s their second acquisition to start to try to roll up the ENUM database services that are out there,” Longo says. XConnect in May acquired another ENUM service, the German company E164.info, which contributed approximately 1.5 million European numbers to its ENUM database. (See Xconnect to Buy e164.info.)

Longo says IPeerX is a logical acquisition target for XConnect. “They’ve got carriers and they’ve got traffic, so I see this as very good for XConnect,” Longo says. “Also, they’ve got a position in North America." XConnect is based in the U.K. and has customers worldwide.

IPeerX has a full-time staff of three people, all of whom will be kept on, XConnect says.

— Mark Sullivan, Reporter, Light Reading

Want to know more about VOIP Peering? Check out this archive of a recent Webinar: VOIP Peering: Essentials for Direct Service Interconnection moderated by Heavy Reading's John Longo and sponsored by Covergence Inc. and Neustar Inc. (NYSE: NSR).

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