VON: EarthLink bets future growth on voice services

BOSTON--EarthLink is in the midst of launching a suite of voice services that represent its future growth opportunities, to include line-powered residential VoIP and a fixed-mobile convergence service. The ISP is banking on its reputation for customer support and service to enable it to win over customers from both telcos and cable companies.

“We see voice as the next growth market--it’s our number one priority right now,” said Stephen Howe, vice president of voice for EarthLink. “These are early days yet for VoIP. It’s a five-mile race, and the gates are just opening. There’s a lot of running yet to be done.”

EarthLink’s product plans include its free Internet calling service, Vling, which is launched last June; EarthLink TrueVoice, a residential ATA-based service that will replace its resale of Vonage; line-powered VoIP, which it is trialing with Covad Communications in Dallas, San Francisco and Seattle later this year; and wireless convergence service it will launch as an MVNO through its joint venture with SK Telecom, a Korean wireless company.

The latter service could be highly disruptive, Howe said.

“Many people would be happy to fire their phone company and use a wireless replacement,” he said. “But there are two problems--they don’t get wireless service inside the home and it’s expensive. Wi-Fi solves both of those problems.”

A converged wireline-Wi-Fi VoIP service addresses both issues, Howe said. Users have a dual-mode CDMA-Wi-Fi handset that uses the wireless network when not at home or work but routes calls over the VoIP network through a Wi-Fi access point when the handset is in range of either a home or business unit.

The opportunities to use Wi-Fi mount as it is more widely deployed in municipal networks. EarthLink is active in the muni market and is one of the finalists in the competition to build Philadelphia’s municipal Wi-Fi net.

Vling, which is a Skype-like free Internet calling service, is SIP-based and intended to be part of what EarthLink hopes will be a growing coalition of free Internet calling services that interoperate. It has already announced interoperability with GoogleTalk.

“We think this should work like e-mail, where it doesn’t matter what your email address is, or who your provider is,” Howe said. “Instant messaging is different--AOL users can’t talk to Yahoo users, and that’s not optimum for consumers. We hope you will see a coalition forming around interoperability.”

That wouldn’t require everyone to be SIP-based, although using SIP would make interoperability easier, he added.

EarthLink TrueVoice will launch in two weeks, and the ISP will be very actively marketing the service.

“We have been reselling Vonage but we didn’t actively market,” Howe said. “We will be selling this to our base of 1.5 million EarthLink broadband users, in our direct channels and in retail outlets.”

EarthLink earned top ISP ratings from J.D. Powers and Associates, Consumer Reports and PCWorld, and the company will parlay its reputation for service and support in expanding its customer base with voice services as part of a bundle, Howe said.

The line-powered service will be based on Covad’s ADSL2+ offering, and initially will offer an 8 megabit per second high-speed data offering along with voice, he commented.

“We can do more later on--go up in speed or add other services, including video,” Howe said. “We’re not sure what that will be yet, but once we get that pipe to the home via Covad, there are a lot of possibilities.”

The three-city trial, which Howe prefers to call a first deployment, will launch at the end of the fourth quarter, and he expects aggressive expansion after that.

“To use a football analogy, I plan to launch Student Body Right on line-powered voice,” he said. “It’s a big part of EarthLink’s future.”